Cygnisol (Pty) Ltd v Controller of Petroleum Products and Others (11300/24P) [2025] ZAKZPHC 125 (26 November 2025)

Case Note

Cygnisol (Pty) Ltd v The Controller of Petroleum Products and Others
Case No: 11300/24P
Delivered: 26 November 2025

Reportability

This case is reportable due to its implications on the regulatory framework governing the petroleum industry in South Africa, specifically regarding the lapse of retail licenses and the role of administrative decision-makers in reinstating such licenses. The judgment confirms the legal boundaries within which regulatory authorities operate, emphasizing that the cessation of a retail license follows strict statutory provisions and cannot be revived through administrative action once lapsed. The significance of this matter lies in its reinforcement of the principles of legality and rationality in administrative actions, providing guidance for future cases involving similar circumstances.

Cases Cited

• Pietermaritzburg Corporation v Union Government 1935 NPD 36
• Minister of Law and Order v Zondi 1992 (1) SA 468 (N)
• Manyasha v Minister of Law and Order 1999 (2) SA 179 (SCA)
• Energi Licences (Pty) Ltd v Controller of Petroleum Products [2024] ZAGPPHC 301
• MEC for Health, Eastern Cape and Another v Kirland Investments (Pty) Ltd t/a Eye & Lazer Institute [2014] ZACC 6; 2014 (3) SA 481 (CC)
• Koyabe and Others v Minister of Home Affairs and Others (Lawyers for Human Rights as Amicus Curiae) [2009] ZACC 23; 2010 (4) SA 327 (CC)
• Pine Glow Investments (Pty) Ltd v Minister of Energy and Others [2025] ZASCA 75; [2025] 3 All SA 314 (SCA)
• United Watch & Diamond Co (Pty) Ltd and Others v Disa Hotels Ltd and Another 1972 (4) SA 409 (C)
• Gensinger & Neave CC and Others v Minister of Mineral Resources and Energy and Others [2024] ZASCA 49; 2025 (4) SA 84 (SCA)
• National Council of and for Persons with Disabilities v Independent Communications Authority of SA [2025] ZASCA 161

Legislation Cited

• Promotion of Administrative Justice Act 3 of 2000
• Petroleum Products Act 120 of 1977
• Regulations Regarding Petroleum Product Site and Retail Licences GN R286 in GG 28665 of 27 March 2006

Rules of Court Cited

No specific rules of court were cited in the judgment.

HEADNOTE

Summary

This case involves an application by Cygnisol (Pty) Ltd seeking a review of the decisions made by the Controller of Petroleum Products regarding the retail license of Bra Cass (Pty) Ltd. The Controller had initially acknowledged that Bra Cass's license had lapsed due to non-compliance with statutory requirements but later attempted to reverse this decision, stating that the license remained valid. The court determined that Bra Cass's license had indeed lapsed by operation of law, rendering the Controller’s attempts to revive the license unlawful and invalid.

Key Issues

The key legal issues addressed by the court include: 1. Whether Bra Cass's retail petroleum license lapsed in accordance with the regulations and, if so, whether it could be revived by administrative action. 2. The procedural objections raised by Bra Cass concerning the alleged failure of Cygnisol to exhaust internal remedies, issues of locus standi, and claims of procedural delay under PAJA. 3. The legality and rationality of the Controller's decisions to reinstate a lapsed license and the implications for competitive fairness in the petroleum retail market.

Held

The court held that Bra Cass’s retail license had lapsed as of 5 December 2020 by operation of law per the relevant regulations, and any subsequent decisions made by the Controller to revive or assert the validity of the license were ultra vires and invalid. The court dismissed all preliminary points raised by Bra Cass and ordered the Controller to set aside the wrongful decisions, declaring all actions post-lapse as invalid.

THE FACTS

Bra Cass (Pty) Ltd received its retail licence on 5 December 2019, which mandated that it commence operations within one year to avoid automatic lapse. However, Bra Cass failed to initiate operations or to apply for an extension within the allowable timeframe. Consequently, by 5 December 2020, the license was deemed to have lapsed. On 31 August 2023, the Controller formally notified Bra Cass of the lapse, instructing it to surrender the license.

Subsequently, Bra Cass attempted to contest the Controller's decision via representations, which were unsupported by the statutory framework that did not allow for such remedies post-lapse. Nonetheless, on 6 November 2023, the Controller retracted the lapse notice and wrongfully stated that Bra Cass’s license remained valid. Cygnisol, a nearby competitor, challenged this decision, alleging it was unlawful and prejudiced its business interests.

THE ISSUES

The court faced several legal questions, primarily whether the Controller’s initial acknowledgement of the lapse was binding or could be overturned, and whether the subsequent attempts to declare the license valid were lawful. Further, it considered procedural challenges regarding Cygnisol's standing to bring the review application, adherence to internal remedy procedures, and timeliness of the application under the Promotion of Administrative Justice Act.

ANALYSIS

The court's reasoning emphasized the strict interpretation of the regulatory framework surrounding petroleum licenses. It highlighted that the regulations prescribed a mandatory timeline for commencing operations, and any non-compliance led to an automatic lapse without room for administrative revival. The court referred to established legal principles regarding the finality of lapsed rights, asserting that administrative authorities could not act without jurisdiction once a decision rendered a license non-existent.

In dismissing the preliminary objections raised by Bra Cass, the court underscored that the need for an internal appeal relied on the existence of a valid license, which was absent. The analysis revealed that Cygnisol had a direct interest due to its competing status, warranting standing in the matter. On the delay issue, the court found Cygnisol's application timely, having been filed within the prescribed period following the delivery of reasons under PAJA.

REMEDY

The remedy granted involved the review and setting aside of the Controller's decisions deemed unlawful, confirming the automatic lapse of Bra Cass's license. The court ordered Bra Cass to surrender the lapsed license within 14 days and directed the Controller to enforce this surrender. Costs were awarded against both the Controller and Bra Cass, reflecting the seriousness of their unlawful actions.

LEGAL PRINCIPLES

The essential legal principles established in this judgment clarify that: 1. A retail license lapses automatically if not activated within the mandated timeframe, as per the governing regulations. 2. Lapsed rights cannot be reinstated through administrative action, emphasizing the need for regulatory bodies to operate within the bounds of their legislative authority. 3. Competitors in a market have standing to contest unlawful administrative actions that distort fair competition. 4. Administrative decisions must adhere to principles of legality and rationality, holding regulatory authorities accountable for overstepping their jurisdiction.