Case Law[2023] ZACC 4South Africa
Rissik Street One Stop CC t/a Rissik Street Engen and Another v Engen Petroleum Ltd (CCT 196/21) [2023] ZACC 4; 2023 (4) BCLR 425 (CC); 2024 (4) SA 447 (CC) (1 February 2023)
Constitutional Court of South Africa
1 February 2023
Headnotes
Summary: Petroleum Products Act 120 of 1977 — section 12B —stay of eviction proceedings — pending outcome of section 12B arbitration — continued occupation after the expiry of an operating lease permissible — purpose of the Act — transformation of the petroleum industry — specific relief sought need not be specified in request to Controller of Petroleum Products
Judgment
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## Rissik Street One Stop CC t/a Rissik Street Engen and Another v Engen Petroleum Ltd (CCT 196/21) [2023] ZACC 4; 2023 (4) BCLR 425 (CC); 2024 (4) SA 447 (CC) (1 February 2023)
Rissik Street One Stop CC t/a Rissik Street Engen and Another v Engen Petroleum Ltd (CCT 196/21) [2023] ZACC 4; 2023 (4) BCLR 425 (CC); 2024 (4) SA 447 (CC) (1 February 2023)
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CONSTITUTIONAL
COURT OF SOUTH AFRICA
Case CCT 196/21
In
the matter between:
RISSIK
STREET ONE STOP CC
t/a
RISSIK STREET
ENGEN
First
Applicant
WILLEM
JOHANNES KNOESEN
Second
Applicant
and
ENGEN
PETROLEUM
LIMITED
Respondent
Neutral
citation:
Rissik Street One Stop CC
t/a Rissik Street Engen and Another v Engen Petroleum Ltd
[2023]
ZACC 4.
Coram:
Zondo CJ, Baqwa AJ, Kollapen J, Madlanga J,
Majiedt J, Mbatha AJ, Mhlantla J,
Rogers J and
Tshiqi J
Judgment:
Kollapen J (unanimous)
Heard
on:
4 August 2022
Decided
on:
1 February 2023
Summary:
Petroleum Products Act 120 of 1977
—
section 12B
—stay
of eviction proceedings — pending outcome of
section 12B
arbitration — continued occupation after the expiry of an
operating lease permissible — purpose of the Act —
transformation of the petroleum industry — specific relief
sought need not be specified in request to Controller of Petroleum
Products
ORDER
On
appeal from the Supreme Court of Appeal (hearing an appeal from the
High Court of South Africa, Limpopo Division, Polokwane)
the
following order is made:
1.
Leave to appeal is granted.
2.
The appeal is upheld.
3.
The order of the Supreme Court of Appeal is set aside and replaced
with the following:
“
a)
Subject to (b) below the appeal is dismissed with costs.
b)
The stay granted in paragraph 23.1 of the High Court’s order
will endure pending
the final outcome of any process arising from the
applicants’ request to the Controller of Petroleum Products
(Controller)
in terms of
section 12B
of the
Petroleum Products
Act 120 of 1977
.
c)
The respondent is interdicted from taking any steps that will
adversely affect
the operations of the first applicant pending the
final outcome of the process referred to the Controller.”
4.
The respondent is to pay the costs of the applicants in this Court,
including
the cost of two counsel.
5.
The Registrar of this Court is directed to forward a copy of this
judgment to
the Minister of Mineral Resources and Energy, the
Director General of the Department of Mineral Resources and
Energy and the Controller
and to draw their attention to [85] to
[88] of the judgment.
JUDGMENT
KOLLAPEN J
(Zondo CJ, Baqwa AJ, Madlanga J, Majiedt J,
Mbatha AJ, Mhlantla J, Rogers J and
Tshiqi J
concurring):
Introduction
[1]
Section
12B of the Petroleum Products Act
[1]
(PPA) was introduced in recognition of the deep inequality within the
retail fuel industry and with the objective of transforming
that
industry. It introduced a normative framework of fairness and
reasonableness that would apply to all contracts in the
industry. It
also created an arbitral mechanism to ensure that unfair or
unreasonable contractual practices were capable
of being identified
and corrected. This case presents compelling evidence of the
contours of that inequality while at the
same time representing a
searching test of the scope and efficacy of the legislative promise
that section 12B heralded.
[2]
In
Business
Zone CC
,
[2]
this Court expressed the importance of transforming the petroleum
industry to ensure that unequal bargaining power in the industry
was
addressed for those doing business in that industry, as well as
empowering historically disadvantaged South Africans in
the
petroleum and liquid fuels industry. Mhlantla J explained:
“
One
of the purposes of the [Petroleum Products] Amendment Act is set out
in its preamble and is, amongst others, ‘to promote
transformation of the South African petroleum and liquid fuels
industry’. Schedule 1 of the Amendment Act goes
on to
introduce an industry charter ‘on empowering historically
disadvantaged South Africans in the petroleum and liquid
fuels
industry’. Unequal bargaining power in the petroleum
industry is pervasive even in more developed countries such
as our
common law comparator, England, whose history of inequality pales in
comparison with our own.”
[3]
Parties
[3]
The first applicant, Rissik Street One Stop CC, is a
retailer of petroleum products and has since 1998 leased premises
from
Engen in terms of an operating lease agreement
(operating lease). The second applicant is Mr Willem
Johannes Knoesen,
the sole member of the first applicant
(collectively Rissik Street). The respondent, Engen
Petroleum Limited (Engen),
carries on business as a manufacturer,
marketer and bulk distributor of petroleum, diesel and chemical
products. It is the
lessee of Portions 1, 3 and the Remainder
of Erf 3[…], Pietersburg Township (premises) in terms of a
notarial deed of lease
(notarial lease) it concluded with the owner
of the premises. Engen sublet the premises to Rissik
Street.
Factual
background
[4]
The operating lease that was in place at the time of the
dispute between the parties was concluded on 30 March 2015.
It
commenced on 1 April 2015 and was scheduled to end
on 30 June 2018.
[5]
In terms of the operating lease, Engen was obliged to furnish
Rissik Street with at least 12 months’ notice if it intended
not to renew the operating lease. The operating lease
recognised Rissik Street’s right to sell the business in
the
event of the non-renewal of the lease, in which event Rissik Street
would have a period of 12 months prior to the termination
of the
lease within which to sell the business. The operating lease
provided that Engen could not unreasonably withhold its
consent to
any proposed sale. This was presumably in recognition that
Rissik Street had an “entrenched value”
in the business,
which it was entitled to realise in the event of the termination of
the operating lease.
[6]
Prior to the termination of the notarial lease and the
operating lease, the landowner required a R3 million payment
from Engen
as a condition to renew the notarial lease. Engen
agreed to pay the R3 million and the notarial lease was extended
for
20 years. Engen in turn sought to recover the
R3 million paid to the landowner from Rissik Street by
requesting
it to pay the R3 million as a condition for renewing
the operating lease. The parties were unable to reach agreement
in relation to the R3 million payment, resulting in the
operating lease not being renewed.
[7]
When the parties were unable to reach agreement on the renewal
of the operating lease, Engen gave notice of termination on
2 October 2017 and advised Rissik Street that the
operating lease would terminate on 31 October 2018. This
was to accommodate the 12-month period within which Rissik Street had
the right to sell, as provided for in the operating lease.
Engen further advised Rissik Street of their right to seek a
purchaser for the business.
[8]
On
25 May 2018, Rissik Street introduced a potential purchaser
to Engen and sought Engen’s approval.
[4]
Engen refused to give its approval. When Rissik Street
requested reasons for the refusal, Engen, purporting to
rely on
clause 10.1 of Schedule 3 to the operating lease, took the
position that its refusal constituted an “absolute
and
unfettered” discretion as provided for in the operating lease
and that it need not furnish Rissik Street with any
reasons for
the decision. This was on 22 June 2018.
[9]
Engen’s letter in response to Rissik Street’s
request to approve the sale reads:
“
1
We refer to your correspondence of even date.
2
As you are no doubt aware, in terms of clause 10.1 of Schedule 3 to
the Agreement
of Lease and Operation of Service Station between the
parties:
‘
The
exercise of any discretion by [Engen] contemplated by the provisions
of this Schedule 3 shall be absolute and unfettered, and
[Engen] need
not furnish the [Rissik Street] with its reasons for any such
exercise.’
3
Our rights remain strictly reserved.”
Rissik
Street’s request for arbitration
[10]
On 25 July 2018, Rissik Street submitted a request
for arbitration to the Controller of Petroleum Products
(Controller),
in terms of section 12B of the PPA alleging an
unfair or unreasonable contractual practice on the part of Engen.
Rissik Street’s
owner, Mr Knoesen, complained that,
among other things, he had introduced two potential purchasers with
the requisite supporting
documents in May 2018, but Engen had refused
to sell to either of them and refused to provide reasons. This
left Rissik Street
unable to exercise its right in terms of the
operating lease. If it did not know why particular buyers were
not approved,
it was unable to remedy the defect or determine whether
Engen’s consent had been unreasonably withheld.
Mr Knoesen
complained:
“
3.3
I am now faced with the situation at the end of the franchise period
where my business will be terminated
on 31 October 2018.
3.4
Although I have a clear contractual right to sell the business and to
the proceeds thereof,
Engen has, without providing any reasons
thereto, refused to authorise the purchase by any party.”
[11]
Rissik Street concluded its request to the Controller by
asserting that it wished to sell the business and to be afforded the
opportunity
to do so without being frustrated by Engen at every turn.
[12]
On 7 September 2018, Rissik Street wrote an email to the
Controller enquiring as to when they could expect a response to their
request
for arbitration submitted on 26 July 2018. No
response was received. On 17 October 2018, Rissik Street
sent a further email to the Controller requesting an urgent
update regarding their section 12B arbitration request. This
was followed by further emails to the Controller on 28 February 2019
and 5 March 2019, neither of which elicited
any response.
[13]
On 17 January 2019, and while waiting for the decision of
the Controller, Rissik Street introduced another potential
purchaser
of the business to Engen. The proposed purchaser was
willing to pay both the purchase price and the R3 million
premium.
Engen adopted the stance that it did not need to
consider the application as the operating lease between itself and
Rissik Street
had terminated by effluxion of time on 31 October 2018.
[14]
On 22 January 2019, Engen gave Rissik Street written notice to
vacate the premises. Rissik Street refused to vacate the
premises
and in March 2019, Engen instituted eviction proceedings
against Rissik Street in the High Court of South Africa,
Limpopo Division,
Polokwane.
[15]
Rissik Street opposed the eviction application, filed an
opposing affidavit and brought a counter-application for the
proceedings
to be stayed pending the decision of the Controller.
In July 2019, the Controller acting in terms of section 12B, referred
the matter to arbitration. The specific issues referred to
arbitration were:
“
5.1.
By requesting an amount of R3 million for ‘goodwill’
in order to renew their lease agreement.
[Rissik Street] had
never been required to pay such an amount previously
when renewing the lease, as the Franchisee
of the Rissik Street
Engen for the past twenty years, the goodwill generated towards
[Rissik Street] would have been due to
the action of the [Rissik
Street] and its employees not Engen;
5.2.
By not engaging with [Rissik Street] in trying to resolve the matter
and serving
[Rissik Street] with a notice of non-renewal
in terms of 44.2 Schedule 2 of the Operating Lease no reasons
were provided;
and
5.3.
By refusing to authorise sale to either potential purchaser provided
for by [Rissik Street] with
no reasons thereof. As reasons for
refusal were not provided [Rissik Street] is unable to remedy that
defect or sourcing
further interested buyers.”
[16]
At the time of the hearing of both the main application and
the counter application in the High Court in December 2019,
the Controller had referred the practices complained of by
Rissik Street to arbitration.
[17]
Engen subsequently lodged an appeal with the Minister of
Mineral Resources and Energy against the Controller’s
decision
to refer the complaints to arbitration. This appeal
still has to be decided.
Litigation
history
High
Court
[18]
Engen
argued that Rissik Street was in substance not opposing the eviction
application and had no desire to remain in occupation
of the
premises. Instead, Rissik Street laboured under the
incorrect impression that, because they had the right to
sell the
business, they were entitled to remain in occupation while they tried
to do so. Engen’s stance was that it
was under no
obligation, contractually or otherwise, to allow for the unlawful
occupation of the premises to continue, in order
to provide
Rissik Street with a further opportunity to sell the business.
It argued that, as the operating lease
had terminated,
Rissik Street’s continued occupation of the premises was
unlawful.
[5]
[19]
Rissik Street sought that the eviction proceedings in the
High Court be stayed pending a decision by the Controller on
their
request for arbitration, which stay, they argued, should extend
until the conclusion of the arbitration. They contended that
section 12B of the PPA was introduced to address the imbalances
in the relationship between retailers and wholesalers in the
petroleum industry, and that an arbitrator was empowered to make a
corrective award relating to the dispute. That corrective
award
could include an award allowing Rissik Street to remain in
occupation of the premises on the same terms and conditions
as during
the period it was entitled to sell the business.
[20]
The following questions were before the High Court:
(a)
Whether to stay the eviction proceedings, pending a determination
by
the Controller of Rissik Street’s referral of a dispute to
arbitration in terms of section 12B of the PPA.
(b)
If the proceedings were stayed, whether to interdict
Engen from
taking steps that would adversely affect the operations of
Rissik Street, pending the outcome of the arbitration
in terms
of the PPA.
(c)
In the event that Rissik Street’s counter-application
was
refused, whether an order for eviction from the premises should be
granted.
[21]
In
its judgment, the High Court explained that during the notice period,
the operating lease remained valid. During this time
it was
open to the parties, if either was of the view that an unfair or
unreasonable contractual practice had been committed by
the other
party, to request the Controller to submit the matter for
arbitration.
[6]
This, the High Court reasoned, is what Rissik Street did.
[22]
The High Court refused to grant the eviction order pending the
finalisation of the arbitration proceedings. The Court premised
its conclusion on the following:
(a)
It defeats the purpose and spirit of section 12B of the PPA, which
introduces arbitration.
[7]
(b)
In terms of section 12B(2) of the PPA, the parties determine the
rules of arbitration and
are at liberty to include any dispute, which
in the case at hand, may have included eviction proceedings.
[8]
(c)
As soon as Rissik Street were evicted, their sources of income would
be diminished, which
would place them in a weaker position to finance
the pending litigation.
[9]
(d)
Business
Zone CC
[10]
provides that arbitration procedures suspend the institution of court
litigation.
[11]
[23]
The
High Court explained that an arbitrator acting in terms of
section 12B(4)(a) has the power to make such award as is deemed
necessary to correct an unfair or unreasonable contractual practice,
and that the terms of reference of the arbitration had not
yet been
determined. It said that Rissik Street were still at liberty to
seek reinstatement of the operating lease and the
arbitrator was
empowered to make such an award.
[12]
[24]
It
relied on
Business
Zone CC
in concluding that the arbitrator’s power to make an award as
it deems necessary to correct an unfair or unreasonable contractual
practice included the reinstatement of the operating lease.
[13]
[25]
The
High Court found that as the process of referring the matter to
arbitration had already been initiated, it should be given an
opportunity to run its course. It said that it was in the
interests of justice that the eviction proceedings be stayed, pending
the outcome of the referral by Rissik Street to the Controller for a
determination as to whether to submit the matter to arbitration.
[14]
It also interdicted Engen from taking any steps that would adversely
affect the operations of Rissik Street, pending the
final outcome of
the process referred to the Controller.
[15]
The High Court made the following order:
“
23.1.
That the current proceedings are stayed pending the decision by the
Controller on referral by the respondents in terms
[of] section 12B
of the PPA.
23.2.
The applicant is interdicted from taking any steps that will
adversely affect the operations of the respondents
pending the
outcome of the process referred to the Controller.
23.3.
The applicant to pay the respondents costs on a party and party
scale.”
[26]
It is not clear why the order staying the eviction proceedings
was made pending the decision of the Controller when, at the time
the
order was made, the Controller had already taken the decision to
refer the matter to arbitration. The interdictory relief
granted by the High Court, however, provided that the relief granted
was to endure until the completion of the process determined
by the
Controller. If the decision of the Controller was to refer
the matter to arbitration, then Engen was interdicted
from taking
steps that would adversely affect Rissik Street’s operations
until the final outcome of the arbitration process.
The two
components of the order are only compatible if the stay of eviction
order is interpreted to mean that it endures
until the decision of
the Controller and the outcome of that process. This would
then be consistent with the interdict,
which was to endure until the
conclusion of the process determined by the Controller, which could
extend until the end of the arbitration
process.
[27]
To
read the first part of the order literally and restrictively would
create a disjuncture between the two components of the order
and
render them incompatible with each other. If regard is had to
the tenor of the judgment, the High Court had in mind
relief
that would ensure that the process of arbitration be given the
opportunity to run its course.
[16]
It must follow that the first part of the order must be interpreted
both in the context of the judgment as a whole as well
as with the
purpose the order was intended to achieve.
[17]
Supreme
Court of Appeal
[28]
Engen
was granted leave to appeal to the Supreme Court of Appeal. On
appeal, Engen contended that the High Court had erred
in finding that
Rissik Street would still be at liberty to seek reinstatement of
the operating lease at arbitration and that
the eviction of Rissik
Street prior to the arbitration would interfere with the powers of
the arbitrator. Engen submitted
that Rissik Street did not
complain to the Controller in terms of section 12B of the PPA that
the termination of the operating
lease was an unfair or unreasonable
contractual practice.
[18]
[29]
Engen
also contended that the High Court had incorrectly interpreted
this Court’s judgment in
Business
Zone CC
as
authority for the proposition that a referral to arbitration in terms
of section 12B automatically suspended the eviction proceedings.
[19]
[30]
Rissik
Street contended on appeal that in terms of the operating lease, they
had a right to sell the business once Engen had given
notice that it
would not renew the operating lease. They argued that,
despite the termination of the lease agreement,
they were entitled to
remain in occupation of the premises and continue to trade in order
to enable them to sell the business as
a going concern.
[20]
[31]
They said that Engen could not unreasonably withhold its
consent to any such proposed sale and that Engen’s conduct had
frustrated
Rissik Street’s right to sell. It was
that conduct, argued Rissik Street, which the arbitrator had to deal
with.
[32]
The
Supreme Court of Appeal upheld the appeal. It found that
Rissik Street did not, in their request for a referral to
arbitration, contend that the non-renewal of the operating lease
constituted an unfair or unreasonable contractual practice.
As
a result, the notice of referral issued by the Controller did not
include the non-renewal of the operating lease as one of the
issues
to be determined by the arbitrator to be appointed. The
arbitrator could not decide on the non renewal of the
operating
lease, as this was not a matter referred to arbitration.
[21]
On this argument there was no legal basis for Rissik Street
to remain in occupation, reasoned the Supreme Court of Appeal.
[33]
It also found that Rissik Street were entitled to be furnished
with reasons for Engen’s refusal to accept the offers to
purchase
the business. It said, however, that this could not
give rise to a right that would allow Rissik Street to continue to
occupy
the premises when such right was not asserted in the request
for referral to arbitration.
[34]
The
Supreme Court of Appeal found that it was not open to Rissik Street
to rely on their right to sell the business as a form of
security
against eviction and that their right to sell the business should
have been exercised during the currency of the operating lease.
If it was not, then Engen had the right to appoint a new dealer, and
in such event, Rissik Street would be entitled to negotiate
with
the new dealer the terms of any take over of stock and/or
equipment, belonging to it.
[22]
[35]
It also found that the High Court had granted the stay of
eviction on the basis of the mistaken proposition that the
arbitration
procedure suspends the institution of litigation.
It said that the High Court had misdirected itself in its
finding,
as
Business Zone CC
does not support this
proposition. In its analysis of
Business Zone CC
,
the Supreme Court of Appeal explained:
“
The
Constitutional Court’s statement in paragraph 58 of the
judgment that the arbitration suspends the institution of court
litigation is qualified in footnote 33 in which it is stated
that the suspension will depend on the terms of the contract.
Where the contract has ended and no complaint is referred to
arbitration to seek its extension, the effect of the stay granted
by
the [High Court] is to grant a remedy in the interim that cannot be
obtained by way of final relief in the arbitration.”
[23]
It
found that a stay on this basis was not a competent exercise of the
High Court’s power.
[36]
The
Supreme Court of Appeal concluded that the High Court’s
exercise of its discretion to grant the stay of eviction proceedings
was influenced by incorrect principles, entitling it to interfere by
setting aside the order made by the High Court.
[24]
It upheld Engen’s appeal, set aside the order of the High Court
and replaced it with an order dismissing the counter-application.
Rissik Street were ordered to vacate the premises within 30 days
from the date of the order.
[25]
In
this Court
Rissik
Street’s submissions
[37]
Rissik Street contend that this Court’s jurisdiction is
engaged because in several respects the case raises arguable points
of law of general public importance which ought to be considered by
this Court. They say that these issues relate to and
define the
obligations of parties in the retail fuel industry, as well as the
scope of the power of an arbitrator acting in terms
of section 12B of
the PPA. These include:
(a)
Does an arbitrator have the power to make an award to correct an
unfair or unreasonable contractual practice that would allow ongoing
occupation of the premises where the operating lease has expired
and
where the occupant has sought neither an extension nor a renewal of
the lease in the request for referral to arbitration?
(b)
Is it necessary that a request for a referral to arbitration made
in
terms of section 12B of the PPA expressly set out the relief
that the requesting party seeks or is it sufficient for such
a
request to merely allege an unfair or unreasonable contractual
practice, which requires correction?
(c)
What powers does an arbitrator have to correct the conduct
of a
wholesaler who unfairly frustrates the right of a retailer to sell
the business which is the subject of the operating lease?
[38]
On the merits, Rissik Street submit that the Supreme Court of
Appeal erred in concluding that an arbitrator, acting in terms of
section 12B of the PPA, was precluded from considering an extension
of the operating lease or further period of occupation when
the same
was not the subject of the request for arbitration submitted to
the Controller. In this regard, they say that
there exists
no requirement in section 12B of the PPA for a requesting party
to specify the relief it seeks – all that
is required is the
allegation of an unfair or unreasonable contractual practice.
[39]
They also contend that the Supreme Court of Appeal erred in
failing to have regard to the transformative objectives of section
12B
of the PPA in interpreting the power of the arbitrator in the
restrictive manner in which it did.
[40]
Finally, Rissik Street contend that Engen had unreasonably
frustrated their right to sell the business in the 12
-
month
period provided for in the operating lease and that this constituted
an unfair or unreasonable contractual practice. What
they seek
is to be placed back in a position that will enable them to sell
their business. That will require them to retain
occupation of
the business during this period. They argue that, if they lose
occupation of the premises, the business will
cease to exist as a
going concern and there will be nothing, apart from the stock and
equipment, to sell.
[41]
An award to correct Engen’s unfair or unreasonable
practice, they say, requires them to remain in occupation to enable
them
to sell the business. This, they say, would not be an
extension or a renewal of the operating lease, which they do not
seek,
but simply an entitlement to occupy the premises for a
time-bound period.
Engen’s
submissions
[42]
Engen maintains that the Supreme Court of Appeal was correct
in its conclusion that the failure by Rissik Street to identify the
non-renewal or extension of the operating lease as an unfair or
unreasonable contractual practice was fatal to their attempts
to
resist its eviction. It argues that if the issue of occupation
is not the subject of the referral to arbitration, then
the
arbitrator has no power to make an award that relates to the
occupation of the premises after the expiration of the operating
lease. Simply put, it is Engen’s case that the arbitrator
cannot determine an issue that has not been raised in the
request for
referral to arbitration submitted to the Controller. As
Rissik Street had not expressly raised the issue
of their
continued occupation of the premises beyond the expiry of the
operating lease in their request to the Controller, that
issue would
not fall within the remit of the arbitrator.
[43]
In addition, it is its contention that an arbitrator cannot
award an extension of tenure where the operating lease has expired.
Engen says that having failed to sell the business during the
period provided for in the operating lease, Rissik Street
has no
claim to extended occupation of the premises for the purpose of
further attempting to sell the business.
[44]
Engen concludes by saying that there exists no basis in law
for a stay of eviction pending an arbitration in terms of section 12B
of the PPA. As the arbitrator will not have the power to make
any award that relates to occupation of the premises, no claim
for a
stay is therefore triggered or justified.
The
issues
[45]
The
following issues require determination:
(a) Is
the jurisdiction of this Court engaged?
(b) Should
leave to appeal be granted?
(c) Does
the arbitrator have the remedial power in terms of section 12B(4)
of the PPA to allow a party
to an agreement, to continue in
occupation of the leased premises after the expiration of the
operating lease? In particular,
under circumstances where
neither a renewal nor an extension of the operating lease is sought,
but where the continued occupation
may be necessary to correct an
unfair or unreasonable contractual practice?
(d)
Is a party who submits a request for a referral to arbitration in
terms of section 12B of
the PPA obliged, at the time of the
request, to set out the nature of the relief that may ultimately be
sought?
(e)
Can a court grant a stay of eviction proceedings pending the
determination of arbitration under section 12B
of the PPA?
Jurisdiction
and leave to appeal
[46]
The central issue before this Court is whether the remedial
power of an arbitrator in section 12B(4)(a) may extend to
allowing
a party to an operating lease which has expired, to continue
in occupation of the leased premises. In particular, when the
nature of the occupation would not be in the form of a renewal or an
extension of the lease, but where the continued occupation
may be
necessary to correct an unfair or unreasonable contractual practice.
[47]
A further issue is whether a party who alleges an unfair or
unreasonable contractual practice is obliged to set out the relief it
seeks in its request for a referral to arbitration. Arising
from that is the question of whether an arbitrator would be precluded
from considering such relief in any award if it was not sought as
part of the request for the referral.
[48]
Both issues relate to the powers of an arbitrator and raise
arguable points of law of general public importance, which ought to
be considered by this Court. The scope and powers of an
arbitrator acting in terms of section 12B is an issue affecting
the industry as a whole.
[49]
The
issues raised are novel in the context of the evolution of
section 12B of the PPA and the interests of justice warrant
determinative pronouncements in order to bring clarity to contractual
practices within the retail fuel industry. Rissik Street
have also demonstrated reasonable prospects of success. Leave
to appeal should therefore be granted.
[26]
Legal
framework
[50]
Section 12B of the PPA, headed “Arbitration”,
states:
“
(1)
The Controller of Petroleum Products may on request by a licensed
retailer alleging an unfair
or unreasonable contractual practice by a
licensed wholesaler, or vice versa, require, by notice in writing to
the parties concerned,
that the parties submit the matter to
arbitration.
(2)
An arbitration contemplated in subsection (1) shall be heard —
(a)
by an arbitrator chosen by the parties concerned; and
(b)
in accordance with the rules agreed between the parties.
(3)
If the parties fail to reach an agreement regarding the arbitrator,
or the applicable
rules, within 14 days of receipt of the notice
contemplated in subsection (1) —
(a)
the Controller of Petroleum Products must upon notification of such
failure, appoint
a suitable person to act as arbitrator; and
(b)
the arbitrator must determine the applicable rules.
(4)
An arbitrator contemplated in subsection (2) or (3) —
(a)
shall determine whether the alleged contractual practices concerned
are unfair or
unreasonable and, if so, shall make such award as he or
she deems necessary to correct such practice; and
(b)
shall determine whether the allegations giving rise to the
arbitration were frivolous
or capricious and, if so, shall make such
award as he or she deems necessary to compensate any party affected
by such allegations;
(5)
Any award made by an arbitrator contemplated in this section shall be
final and binding
upon the parties concerned and may, at the
arbitrator's discretion, include any order as to costs to be borne by
one or more of
the parties concerned.”
Operating
lease
[51]
The relevant provisions of the operating lease provide:
(a)
Clause 22 of Schedule 2 recognises Rissik
Street’s right to
sell the service station business at any time during the currency of
the operating lease.
(b)
The procedure for the sale is regulated by Schedule
3.
Clause 1.3 of that Schedule provides:
“
Should
[Rissik Street] wish to sell the Business, it may suggest a proposed
purchaser/successor to [Engen], and [Engen] will generally
consider
that proposed successor as a candidate for a new operating lease of
the Premises, subject to the provisions of this Schedule
3. If
the prospective successor . . . meets all of [Engen’s]
selection criteria for a Dealer at the Premises, then
in the absence
of any reason to the contrary, [Engen] will generally be willing to
prefer that prospective successor above others
wishing to operate the
Business at the Premises.”
(c)
Clause 1.6 of Schedule 3 further stipulates
that it has:
“
become
[Engen’s] policy and [Engen] has now agreed that the price that
an incoming Dealer is willing to pay for access to
the premises
concerned may accrue to the outgoing Dealer [i.e. Rissik Street] as a
sale of the business rather than to [Engen]
as consideration for the
conclusion of the operating lease. Accordingly, [Engen] has
agreed that the Dealer has an ‘entrenched
value’ in the
Business and is entitled to realise such entrenched value in the
event of the Dealer wishing to sell the Business
or being required to
sell the Business pursuant to this Agreement. However it is
specifically recorded that the aforesaid
entrenched value of the
Dealer is subject to the provisions of this Schedule 3 and to the
provisions of clause 44 of Schedule 2
of this Agreement.”
(d)
Clause 44.2 of Schedule 2 to the operating lease
confers upon
Rissik Street the right to attempt to sell the business during
the 12-month period preceding the termination
of the agreement.
It provides (in the relevant part) as follows:
“
If
[Engen] intends or elects for any reason not offering [Rissik Street]
a further opportunity to lease the Premises from the
Termination Date
of this Agreement, [Engen] shall endeavour to advise [Rissik Street]
in writing at least 12 months prior
to the Termination Date of this
Agreement. If such advice is not provided at least 12 months
prior to the Termination Date
of this Agreement, [Engen] may still
provide such advice at any time prior to the Termination Date of this
Agreement provided that
[Rissik Street’s] tenure at the
Premises will then be extended for a period beyond the
Termination Date of this Agreement
to ensure that [Rissik
Street] will have received at least 12 months’ notice that
[Engen] intends or has elected not offering
[Rissik Street] a
further opportunity to lease the Premises from the Termination Date
of this Agreement extended as aforesaid.
Any extension as
aforesaid will be on the terms and conditions of [Engen’s]
operating leases at such time.”
(e)
Clause 44.2 then goes on to provide as follows:
“
Should
[Engen] advise [Rissik Street] that it does not intend renewing the
lease between the parties, [Rissik Street] shall be entitled
to
attempt to sell the Business during the remaining period of the
lease, and [Engen] shall not unreasonably withhold its consent
to
such sale. Should [Rissik Street] not have sold the Business
prior to the expiry of the lease, the provisions of sub clause 44.1
of this Schedule 2 shall apply and [Rissik Street] shall not have the
right to any compensation in respect of his loss of the Business.”
(f)
Clause 44.1 of Schedule 2 (mentioned
in the final sentence of
clause 44.2 quoted above) provides that Engen has the right, on
premature termination, to appoint
a new dealer. Rissik Street
is entitled to negotiate with such new dealer in respect of any
takeover of stock and equipment
belonging to Rissik Street on
the premises, alternatively that Rissik Street have the right to
remove stock and equipment
on the premises belonging to it.
Stay
of proceedings
[52]
Section
6(1) of the Arbitration Act
[27]
provides:
“
If
any party to an arbitration agreement commences any legal proceedings
in any court (including any inferior court) against
any other
party to the agreement in respect of any matter agreed to be referred
to arbitration, any party to such legal proceedings
may at any time
after entering appearance but before delivering any pleadings or
taking any other steps in the proceedings, apply
to that court for a
stay of such proceedings.”
[53]
While the parties proceeded on the assumption that
section 6(1) of the Arbitration Act is applicable, I have
doubts about
its applicability. The dispute before the High
Court relates to the attempt by Engen to evict Rissik Street
from the
leased premises. It cannot be said that the parties
agreed to refer the dispute regarding the eviction to arbitration –
something that section 6(1) contemplates as a requirement for a stay
application.
[54]
Firstly, the arbitration under section 12B does not arise by
agreement between the parties but is rendered obligatory by statute.
Secondly, the subject matter of the High Court application and
the arbitration is different, even though tangentially related.
In the High Court, the relief sought was an order for eviction,
while in the arbitration the issue is a complaint that Engen
has
unreasonably frustrated Rissik Street’s right to sell
their business. An award arising out of the arbitration
may
influence the ongoing occupation of the premises, but these are not
the same issues in substance. It is for these reasons
I
conclude that section 6(1) of the Arbitration Act cannot be
called in aid.
[55]
Is there another basis upon which the High Court was empowered
to stay the eviction proceedings? Section 173 of the
Constitution
provides that Superior Courts have the
inherent jurisdiction to regulate their own processes in the
interests of justice.
Section 173 provides:
“
The
Constitutional Court, the Supreme Court of Appeal and the High Court
each has the
inherent power
to protect and regulate their
own process, and to develop the common law, taking into account
the interests of justice.”
(Emphasis added.)
[56]
In
South
African Broadcasting Corp Ltd
,
[28]
the nature of the inherent power of the Superior Courts under section
173 is described as follows:
“
The
power in section 173 vests in the judiciary the authority to uphold,
to protect and to fulfil the judicial function of administering
justice in a regular, orderly and effective manner. Said
otherwise, it is the authority to prevent any possible abuse of
process and to allow a Court to act effectively within its
jurisdiction.”
[29]
[57]
In
Mokone
,
[30]
Madlanga J referred to section 173 as providing the basis for
the courts mentioned in the section to regulate their own
processes taking into account the interests of justice. This
Court then invoked its inherent power and, after being satisfied
that
it was in the interests of justice to do so, stayed proceedings for
the eviction of the applicant pending the finalisation
of associated
proceedings.
[58]
Rissik Street submit that Engen’s refusal to consent to
the sale of the business, without providing reasons for the refusal,
constitutes an unfair or unreasonable contractual practice, which the
arbitrator needs to correct. They argue that the correction
of
the practice may well entail an order that will require them to
remain in occupation of the business pending attempts to sell
it
without being unreasonably impeded by Engen in their attempts to do
so. They say that it is an award of that scope that
will
correct the unfair contractual practice that Engen has committed by
declining to provide reasons for its refusal for the sale
of the
business.
[59]
It is not in dispute that Rissik Street acquired the right to
sell the business as from 2 October 2017 and that they had
12 months to do so. Schedule 3 of the operating lease
records that Engen recognises that Rissik Street have an
“entrenched value” in the business and is entitled to
realise such entrenched value. It is not in dispute that
this
entrenched value has been built up over the 20 years that
Rissik Street have initiated, operated, and grown the business.
[60]
In asserting their right to sell the business, Rissik Street
sought consent for the sale of the business and presented several
offers made by potential buyers to Engen. The first offers were
submitted in May 2018 during the currency of the lease,
while
another offer was submitted in January 2019, after the expiry of
the lease. The latter offer appears to have been
triggered by a
request from Engen to Rissik Street to submit an offer.
[61]
Engen declined to give its consent in respect of the May 2018
offers. It adopted the stance that it did not need to consider
the January 2019 offer, except to point out to Rissik Street
that the operating lease had expired and that it was required
to
vacate the premises. In respect of the May 2018 offers, it took
the position that it was not obliged to give reasons for
its refusal.
It is this refusal without accompanying reasons that
Rissik Street take issue with and allege is an unfair
or
unreasonable contractual practice.
[62]
Whether it is in fact so is a matter for the arbitrator to
determine, but what the enquiry posits is the proper interpretation
of
the operating lease against the backdrop of section 12B of
the PPA. On the one hand, Rissik Street rely on
clause 44.2,
which provides that Engen may not withhold its
consent unreasonably. On the other hand, Engen placed reliance
on clause 10.1
of Schedule 3 to the operating lease, which
says that any discretion it exercises is absolute and unfettered and
that it need
not furnish reasons for it.
[63]
In
this interpretative exercise the maxim
generalia
specialibus non derogant
[31]
(general provisions do not derogate from special ones) finds
application. Rissik Street’s entitlement not to have
the consent to a proposed purchaser unreasonably withheld is
contained in clause 44.2 of Schedule 2 and is specific in addressing
the terms of Rissik Street’s right to sell the business
upon termination of the agreement. Engen’s reliance
on
the clause affording it the discretion to refuse giving such reasons
is a general term contained in clause 10.1 of Schedule
3 of the
operating lease. In Schedule 2 – the same Schedule
that contains clause 44.2 – there is a separate
clause dealing
with discretion. Clause 36.1 of Schedule 2 provides that any
consent from Engen shall not be unreasonably
withheld unless it is
expressly stated to be within Engen’s discretion, “in
which event [Engen] shall not be liable
to give any reasons”.
This may well imply that where a provision in Schedule 2
stipulates that consent shall not be
unreasonably withheld (clause
44.2 is such a provision), Engen is obliged to give reasons. The
maxim may require the general
provision in clause 10.1 of
Schedule 3 to yield to the special provisions of Schedule 2, in
particular, clause 44.2
read with clause 36.1 of Schedule
2.
[64]
Whether Engen’s refusal to consent to the proposed sale
of the business was reasonable is not possible to discern in the
absence
of any reasons being furnished by Engen. This is at the
heart of the complaint by Rissik Street and their request to
the Controller.
If Engen has an absolute and unfettered
discretion to refuse to consent and not furnish reasons, then it
would not be possible
for Rissik Street to properly exercise
their right to sell the business when they remain unaware of what
factors Engen takes
into account in deciding to grant or refuse
consent to a proposed sale. This is, however, a matter that the
arbitrator will
be required to consider in determining whether
Engen’s conduct in this respect constitutes an unfair or
unreasonable contractual
practice.
[65]
It, however, cannot be rejected as a reasonable possibility
that the arbitrator may determine that the refusal to provide reasons
constitutes an unfair or unreasonable contractual practice. In
addition, even if it is found that clause 10.1 of Schedule 3
applies, whether such a stance is unfair or unreasonable would still
require consideration and again it cannot be rejected as a
reasonable
possibility that the arbitrator may find that reliance on clause 10.1
is an unfair or unreasonable contractual
practice.
[66]
On that basis, Rissik Street maintain that they should have
the proper opportunity to sell the business, which has not happened
thus far. They go on to argue that they require to remain in
occupation of the business in order to sell it and that, if evicted,
all that they will be capable of selling will be the stock and the
equipment of the business. In addition, they only seek
to
remain in occupation for the period provided for in the lease in
order to sell the business. They say that they were deprived
of
the opportunity to sell the business because Engen unfairly or
unreasonably frustrated their attempts to do so.
[67]
Rissik Street say eviction will bring to an end its ability to
sell the business. While Engen disputed this assertion in its
affidavits in the High Court, at the hearing of the matter in this
Court, it conceded that this was in fact so. This was
an
important and appropriate concession in the matrix of this
application. In doing so, Engen accepts that Rissik Street’s
entrenched value in the business will dissipate in Rissik Street’s
hands if they were evicted. Despite the concession,
Engen
persisted in its stance that Rissik Street’s right to sell
cannot survive the currency of the operating lease.
[68]
Again, and while the arbitrator will have to determine the
scope of any award that may be made, Rissik Street have built up a
business
with a substantial value (R6 million to R8 million).
They acquired the right to sell the business within a limited
time-frame of 12 months and made bona fide attempts to do so.
Regard being had to Engen’s stance in refusing to consent
to
the sale without providing reasons, it cannot be rejected as a
reasonable possibility that the arbitrator will find that Engen
frustrated Rissik Street’s 12-month window of opportunity
to sell the business.
[69]
Rissik Street say that they seek a fair opportunity to
sell the business which they did not have previously. As a
reasonable
possibility, the arbitrator might make an award granting
Rissik Street a further period of occupation to compensate it
for
as much of the 12 month selling period as they were
deprived of due to the unfair or unreasonable contractual practice.
[70]
The occupation of the premises may therefore be significant in
the scheme of any corrective award that may arise in terms of section
12B. If Rissik Street were evicted, they would not be able
to sell the business including the goodwill that they have
built up.
In that event, Engen will be at liberty to acquire a new tenant
without recourse to Rissik Street and the
goodwill will be a
factor in Engen’s favour in the rental consideration any new
tenant would be willing to pay. The
operating lease refers
to this as the “entrenched value” of the business
but, in substance, it is the goodwill
of the business.
[71]
The consequence of all of this is that Rissik Street would,
without having had the proper opportunity to do so, have lost their
right to recoup the entrenched value in the business they have built
up over more than 20 years. Engen, which has no equitable
claim
to that goodwill, would reap the benefits of it in the consideration
it will be able to garner from a potential new tenant.
This is
inequitable. It runs counter to the transformational objectives
of the PPA and only entrenches the inequality in
the fuel industry
between wholesalers and retailers, by providing Engen with an undue
benefit that it was never entitled to
in the form of the goodwill to
the business.
[72]
Such an outcome would be inimical to bringing about change in
power relations in the fuel industry, to which the PPA is committed.
Courts must, in the pursuit of these legitimate constitutional
imperatives, interpret the PPA and the contracts in the industry
through the lens of the transformative commitment that the PPA seeks
to achieve. This, of course, does not mean that courts
are at
liberty to make and impose contracts for the parties in the name of
transformation and beyond what the parties may have
intended for
themselves. However, section 12B enjoins the parties to look
beyond the written terms of their contracts in
recognising the
normative framework of fairness and reasonableness that the section
introduced as an overarching framework that
governs all contracts in
the retail fuel industry.
[73]
Arising from that, the interpretative question that presents
itself cannot be confined to whether or not the terms of the contract
permit a particular contractual practice, but whether such a practice
conforms to the requirements of fairness and reasonableness.
If
it does not, the terms of the contract cannot prevail. It,
therefore, cannot be a case where reliance on contractual terms
is
dispositive of a dispute between the parties. Rather, section
12B of the PPA requires that all contractual practices in
the retail
fuel industry be interrogated against the standard of fairness and
reasonableness. It represents, in many respects,
a seismic but
necessary shift in the framework of contractual relationships in the
retail fuel industry in the quest to transform
that industry.
[74]
Reverting to the dispute before this Court, occupation of the
premises may well be key to how the arbitration unfolds and the
choice
of a necessary corrective award, if one is required.
Engen resists the ongoing occupation of the premises and any attempt
by Rissik Street to have a court-sanctioned occupation in place
as interim relief. It relies on common law grounds
for the
eviction of Rissik Street and says that, absent a claim for
renewal or reinstatement of the operating lease, there
exists no
legal basis for Rissik Street to continue in occupation after
the expiry of the operating lease.
[75]
This line of reasoning, which is also what the Supreme Court
of Appeal embraced, is premised on the assumption that Rissik Street
would require the lease to be renewed in order to ground a claim to
remain in occupation. This, however, has never been the
case
for Rissik Street nor is that the complaint put before
the Controller. Rissik Street contend that the
relationship
with Engen has broken down, and they do not seek the
renewal or reinstatement of the operating lease. The position
taken
by the Supreme Court of Appeal leads, with respect, to an
illogical outcome. If Rissik Street were required
to
seek the renewal of the lease to secure their ongoing occupation,
then they would not have acquired the right to sell the business.
A renewal of the operating lease for five years would have
precluded any sale of the business, as a sale is only permitted
in
the 12 month period before the expiration of the
operating lease. A renewal of the operating lease
would
not have achieved that outcome. To that extent, the
Supreme Court of Appeal erred in relying on this reasoning and
introducing
this conditionality to Rissik Street’s claim in
upholding the appeal.
[76]
What Rissik Street seek is not the extension or the renewal of
the operating lease, but rather the opportunity to sell its
business in accordance with the terms of the operating lease. In
addition, they seek the acknowledgement that the sale of
the business
is inextricably linked to their ability to remain in occupation in
order to do so.
[77]
The Supreme Court of Appeal, however, concluded that even if
Rissik Street’s complaint was found to be an unfair or
unreasonable
practice, it will not vest any remedial power in the
arbitrator to permit Rissik Street to remain in occupation pending
the sale
of the business.
[78]
I disagree with this conclusion. Section 12B vests wide
remedial powers in the arbitrator, which are “necessary to
correct
such practice”. If the arbitrator finds in favour
of Rissik Street on this aspect, then it may well follow that
the corrective award necessary would be one allowing Rissik
Street the opportunity to sell the business. If that is
only
possible while Rissik Street remain in occupation, then under
those circumstances, occupation of the premises may well
be a
necessary part of any remedial award. The pleadings in the
arbitration are still to be filed, and Rissik Street
may well,
in those pleadings, seek the relief of ongoing occupation pending the
sale of the business. This would be consistent
with the
complaint they had submitted.
[79]
Section 12B does not require an aggrieved party to specify the
relief that it seeks at the time it requests a referral to
arbitration.
While the terms of the arbitration must mirror the
complaint, the relief that is considered and ultimately granted is
not
required to be spelt out in the request to the Controller, and
the relief in the form of an award is, in any event, a matter for
the
arbitrator to determine. It cannot be that an aggrieved party
must set out the relief it seeks in its request and
that it may in
future be barred from doing so if it does not. This narrow
approach is inconsistent with what has been described
as the wide
remedial power of an arbitrator acting in terms of section 12B.
[80]
It therefore follows that section 12B would not stand in
the way of an arbitrator having such powers. For clarity, it
is
not the power to renew or reinstate which I find to exist, but to
make an award that enables Rissik Street to continue
to occupy
the premises pending the sale of the business. The source of
that power is not in the common law, but in the
provisions of
section 12B that oblige an arbitrator to make an award to
correct an unfair or unreasonable practice.
Such a wide power
is consistent with the transformative objects of the PPA and the need
to address the inequalities in the fuel
industry.
[81]
The Supreme Court of Appeal erred in the conclusions it
reached regarding both the failure to raise the non-renewal of the
operating
lease in the request for arbitration and in the limited
manner in which it interpreted the remedial power of the arbitrator.
It
also incorrectly characterised the issue before it by its
failure to make the connection between the unfair or unreasonable
contractual
practice and the ongoing occupation of the premises by
Rissik Street.
[82]
It follows that the appeal must succeed. Rissik Street
acquired the right to sell the business, which will not be possible
if they cease to be in occupation. If evicted, Rissik Street
will suffer irreparable harm in the loss of the business,
there is no
other remedy, and the balance of convenience favours the granting of
the relief sought. Rissik Street occupy
and continue to
pay “rental” so there is limited prejudice, if any, for
Engen, but an eviction will redound to the
permanent prejudice of
Rissik Street.
[83]
The interests of justice present a compelling argument for the
invocation of this Court’s inherent power to stay the
eviction proceedings pending the finalisation of the section 12B
arbitration. Paramount amongst those interests is the
right of
Rissik Street to seek effective relief in the section 12B
arbitration in respect of Engen’s alleged unfair
or
unreasonable contractual practice. An eviction will render
nugatory Rissik Street’s right to seek effective
relief in
the section 12B arbitration.
Referral
to arbitration and the Controller’s conduct
[84]
One of the worrying features in the timeline relating to the
dispute before the Court is the period of one year that passed
between the request by Rissik Street to the Controller to
refer the matter to arbitration and the decision ultimately
taken by
the Controller. In addition, no less than four emails were
addressed to the Controller during this time
enquiring as to
when a decision would be made. There was no response to any of
those emails and the decision was only taken
when the parties were
already deep into litigation
.
[85]
In
Business Zone CC
, this Court in reflecting on the
value of the arbitral mechanism said:
“
The
purpose of the [Petroleum Products] Amendment Act ‘to provide
for appeals and arbitrations’ through section 12B
cannot be
overlooked. The inherent value of section 12B enabling a
party to resolve a dispute through arbitration rather
than court
proceedings must be recognised. Arbitration offers an
expedient
,
specialised and procedurally flexible forum to resolve disputes.”
[32]
(Emphasis added.)
[86]
A delay of one year undermines the attraction of an expedient
arbitral mechanism that section 12B introduced. If the
decision to refer the matter to arbitration was taken timeously, the
real possibility exists that the arbitration could have been
finalised before the expiration of the operating lease and the
parties could have avoided the spectre of lengthy and costly
litigation.
[87]
If section 12B is to achieve its objective of providing the
parties to a dispute with an expedited arbitral mechanism, there must
be a more efficient turnaround time between the submission of a
request for arbitration and a decision on that request. To
that
end, I intend to direct that a copy of this judgment be submitted to
the Controller of Petroleum Products as well as
the Minster of
Mineral Resources and Energy and the Director General of the
Department of Mineral Resources and
Energy for their
consideration.
Remedy
[88]
The appeal must succeed and the order of the Supreme Court
of Appeal falls to be set aside. The result is that the order
of the High Court must prevail. I made reference earlier
in this judgment to the High Court order and my view that
the
order must be interpreted in the context of the judgment of the High
Court and the purpose that the order sought to achieve.
[89]
That being the case, it must follow that the order staying the
eviction and found in paragraph 23.1 of the order of the High Court,
should as a matter of caution read as follows:
“
That
the current proceedings are stayed pending the decision by the
Controller and the final outcome of any process arsing therefrom.”
[90]
Apart from that being consistent with the judgment and the
order of the High Court read as a whole, it was also evident
from
the proceedings in the Supreme Court of Appeal, as well as
in the hearing before this Court, that the parties proceeded on
the
assumption that the order granted by the High Court was a stay of
eviction pending the final outcome of the section 12B
arbitration. There can accordingly be no prejudice to any of
the parties if the High Court order is interpreted to give proper
effect to its purpose.
Conclusion
[91]
I am satisfied that a proper case was made out for the interim
relief in the form of a stay of eviction that Rissik Street seek.
Leave to appeal must be granted and the appeal must be upheld. The
order of the Supreme Court of Appeal must be set aside
and
substituted with the order of the High Court.
Order
[92]
The following order is made:
1.
Leave to appeal is granted.
2.
The appeal is upheld.
3.
The order of the Supreme Court of Appeal is set aside and replaced
with the following:
“
a)
Subject to (b) below the appeal is dismissed with costs.
b)
The stay granted in paragraph 23.1 of the High Court’s order
will endure pending the final
outcome of any process arising from the
applicants’ request to the Controller of Petroleum Products
(Controller) in terms
of
section 12B
of the
Petroleum Products
Act 120 of 1977
.
c)
The respondent is interdicted from taking any steps that will
adversely affect the operations
of the first applicant pending the
final outcome of the process referred to the Controller.”
4.
The respondent is to pay the costs of the applicants in this Court,
including
the cost of two counsel.
5.
The Registrar of this Court is directed to forward a copy of this
judgment to
the Minister of Mineral Resources and Energy, the
Director General of the Department of Mineral Resources and
Energy, and
the Controller and to draw their attention to [85]
to [88] of the judgment.
For
the First and Second Applicants:
G
Quixley and M De Beer instructed by Seton Smith and Associates
For
the Respondent:
S
Aucamp instructed by Mathopo Moshimane Mulangaphuma Incorporated
t/a DM5 Incorporated
[1]
120 of 1977.
[2]
Business
Zone 1010 CC t/a Emmarentia Convenience Centre v Engen Petroleum Ltd
[2017]
ZACC 2; 2017 (6) BCLR 773 (CC).
[3]
Id
at para 47. In the context of English law, see the cases of
Alec
Lobb (Garages) Ltd v Total Oil GB Ltd
[1984] EWCA Civ 2
;
[1985] 1 All ER 303
(CA) and
Esso
Petroleum Co Ltd v Harper's Garage (Stourport) Ltd
[1967] 1 All ER 699 (HL).
[4]
Rissik Street says it introduced two purchasers in May 2018, but
Engen claims there was only one.
[5]
Engen
Petroleum Ltd v Rissik Street One Stop CC t/a Rissik Street Engen
,
unreported judgment of the High Court of South Africa Limpopo
Division, Polokwane, Case No 1583/2018 (12 February 2020)
(High Court judgment) at para 8.
[6]
Id at para 13.
[7]
Id at para 20.
[8]
Id.
[9]
Id.
[10]
Business
Zone CC
above
n 2.
[11]
High Court judgment above n 5 at para 20.
[12]
Id at para 21.
[13]
Id.
[14]
Id at para 22.
[15]
Id at para 23.
[16]
Id at para 22.
[17]
University
of Johannesburg v Auckland Park Theological Seminary
[2021]
ZACC 13
;
2021 (6) SA 1
(CC);
2021 (8) BCLR 807
(CC) at paras 66-9.
See also
Eke
v Parsons
[2015] ZACC 30
;
2016 (3) SA 37
(CC);
2015 (11) BCLR 1319
(CC) at
para 29.
[18]
Engen
Petroleum Ltd v Rissik Street One Stop CC t/a Rissik Street Engen
and Another
,
unreported judgment of the Supreme Court of Appeal, Case No 209/2020
(26 May 2021) at para 25.
[19]
Id at para 27.
[20]
Id at para 31.
[21]
Id at para 32.
[22]
Id at para 37.
[23]
Id at para 38.
[24]
Id at para 39.
[25]
Id at para 40.
[26]
S v
Boesak
[2000]
ZACC 25
;
2001 (1) SA 912
(CC);
2001 (1) BCLR 36
(CC) at para 12.
[27]
42 of 1965.
[28]
South
African Broadcasting Corp Ltd v National Director of Public
Prosecutions
[2006]
ZACC 15; 2007 (1) SA 523 (CC); 2007 (2) BCLR 167 (CC).
[29]
Id at para 90.
[30]
Mokone
v Tassos Properties CC
[2017] ZACC 25
;
2017 (5) SA 456
(CC);
2017 (10) BCLR 1261
(CC) at
para 67.
[31]
Christie and Bradfield
Christie’s
Law of Contract in South Africa
8 ed (LexisNexis, Johannesburg 2022) at 276 7 states that
—
“
This
maxim has regularly been used in interpreting statutes, has been
used in interpreting the articles of association of a company,
and
given that there is no difference in approach to interpreting legal
documents, it could be used in interpreting contract.”
This position was
confirmed in
Consolidated Employers Medical Aid Society v Leveton
[1998] ZASCA 114
;
1999 (2) SA 32
(SCA) at 41A - C and in
Lodhi 2
Properties Investments CC v Bondev Developments (Pty) Ltd
[2007]
ZASCA 85
;
2007 (6) SA 87
(SCA) at para 11.
[32]
Business
Zone CC
above
n 2 at para 59.
sino noindex
make_database footer start
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