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[2014] ZAGPJHC 453
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Engen Petroleum Limited v Sagewise 1068 CC t/a Kutloano Filling Station and Another (47215/12) [2014] ZAGPJHC 453 (5 August 2014)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
LOCAL DIVISION, JOHANNESBURG)
CASE
NO
: 47215/12
DATE
:
2014-08-05
In
the matter between
ENGEN
PETROLEUM
LIMITED
APPLICANT
and
SAGEWISE
1068
CC
1
st
RESPONDENT
t/a
KUTLOANO FILLING STATION & ANOTHER
PHINEAS
MBONE
MAGABE
2
nd
RESPONDENT
J
U D G M E N T
SUTHERLAND
J
:
The
applicant, Engen Petroleum Limited, seeks to evict the two
respondents from business premises. The first respondent is styled
Sagewise 1068 CC t/a Kutloano Filling Station and the second
respondent is Phineas Mbone Magabe.
The
Applicant relies on a contractual relationship between itself and the
respondents in respect of the lease of the premises upon
which the
business of a petrol filling station is conducted. The relationship
between them is regulated by written contracts. In
the founding
affidavit, allusion is made to the documentation which identifies the
property clearly, sets out the provisions of
the written agreements
and indicates that the initial lease was concluded for a fixed period
which terminated on 31 March 2009,
which, in terms of a provision of
that lease, continued on a month to month basis thereafter. The
status of the respondents is
that on monthly tenants.
It
is alleged that on 25 May 2012 notice in terms of the agreement was
given to cancel the lease and that the effective date of
termination
was 30 June 2012. On the premise of the applicant being the head
lessee of these premises and on the further premise
that the
respondents’ only rights to occupy the premises are in terms of
a sub-lease, the applicant approached the Court
and sought the
eviction.
In
the answering affidavit these particular averments were not
themselves challenged and there was no reason to suppose that there
are any factual disputes about any of basis upon which the applicant
seeks to assert its rights of possession. There is a challenge
to the
reliance on the applicants on a possessory right. In the answering
affidavit a point is raised about the ‘capacity’,
(I use
that term in its neutral sense), of this particular applicant to
assert its rights as the head lessee,
vis a vis
the
respondents as sub-lessees. The basis of that that challenge is that
the entity from which, so it is alleged, the applicant
as head lessee
procured its rights as head lessee has been liquidated. To that end,
evidence is adduced in support thereof in the
form of an annexure to
its answering affidavit, being an extract from the Registrar of
Companies documentation. That fact is undisputed.
That
is the sole point which is put up relevant to the first of two
arguments advanced by the respondents why the eviction may not
be
effected. The proposition of the respondents is that when a head
lessee who derives its rights of occupation from a lessor finds
itself in a position where the lessor is extinguished, if it is a
juristic person, or dead, if the lessor is a natural person,
the head
lessee
can
no longer assert possessory rights
. When I
asked for the rationale to support that conclusion Mr Savas, who
appears for the respondents, indicated that he was unable
to develop
the point any further.
In
my view, it seems that if one considers the predicament of a lessee
of premises from a lessor-owner or a head lessee from a prior
lessor,
the principle of
Huur gaat voor koop
makes it quite plain that
the head lessee or a sub-lessee as the case may be, derives its
rights from the contractual arrangement
and for the full duration of
the head - lease. It is not suggested in these papers that the rights
which the applicant seeks to
assert as head lessee have yet to be
terminate. In the absence of that assertion, in my view, there can be
no legal significance
to the extinction of the party from whom the
applicant has derived its rights as head lessee.
The
applicant may well have difficulties when the termination of its
lease rights are due but that is not a matter which I am required
to
decide. On the narrower point about the rights of owners and/or of
lessees to assert possessory rights I have been referred
to the
decision in
Pretoria Stadsraad v Ebrahim
1979 (4) SA 193
(T)
per Spoelstra J. That was a matter in which a question arose
concerning the
locus standi
of a person in the predicament of
the applicant who as lessor or head lessee seeks to assert possessory
right rather than the owner.
This decision is authority for the
proposition that the head lessee
vis a vis
its sub-lessee is
indeed vested with
locus standi
to bring such an application.
In
the circumstances, subject to the respondent’s second argument,
I am unable to find any merit in the challenge to the cause
of action
upon which the applicant relies in order to approach the Court.
Having disposed of that point we can turn to what is
the real issue
in the matter.
Self-evidently,
the dispute has arisen within a particular context. There is,
apparently, a widespread grievance on the part of
entrepreneurs who
have engaged in the distribution of petroleum and there is a sense
amongst them, which may or may not be justified,
that petroleum
companies who supply petrol for the purposes of retail trade oppress
them, impose unfair terms upon them, behave
in anti-competitive ways
and generally treat them badly. It is unnecessary for me to express
any view about whether the grievance
is justified. It is clear from
the brief summation I give that
prima facie
one would
have thought that the grievances lie in the realm of competition law
and of the competition tribunal and the machinery
of the Competition
Act.
The
applicants have sought to approach the High Court for relief. The
respondents have addressed their arguments in this forum and
it is
incumbent upon me to resolve this dispute without regard to any
competition principles because there is no jurisdiction vested
in
this court to do so.
There
are two legs to the analysis necessary in order to assess the
respondents’ resistance.
The
critical argument advanced on behalf of the respondents is that a
proper appreciation of the
Petroleum Products Act 120 of 1977
as
amended by the Amendment Act 58 of 2003 and subsequently, has had a
profound effect on the law relating to common law possessory
rights.
The effect of this impact, in short, is that the applicant, which is
the head lessee of these premises and of many other
premises, is no
longer in law vested with a possessory right and cannot invoke its
common law rights to evict sub-lessees because
those common law
rights have, in these particular circumstances, where the
Petroleum
Products Act 120 of 1977
, as amended,(PPA) applies, been
extinguished.
I
was taken to the provisions of the PPA In support of the proposition
that the PPA has had the effect of changing the common law
remedies
which a party in the position of the applicant might have had. I had
my attention drawn to
section 2
, particularly
section 2A
(4),
section
2A
(5) and the definitions in
section 1
of ‘Hold’,
‘site’, ‘manufacture’, ‘retail’
and ‘retail licence’. I
have also had my attention drawn
to the impact of section 25 of the Constitution in relation to the
question of goodwill as a form
property deserving of legal
protection.
The
argument which has to succeed in order for the respondents’
argument to have any traction is that upon a proper interpretation
of
the PPA the common law has been changed. It has been our law for a
very long time that the mere fact that a statute might seek
to
regulate particular subject matter where the common law previously
regulated it is not to be interpreted to mean that the common
law is
extinguished willy-nilly simply because statutory authority has now
trespassed into a realm hitherto regulated by the common
law alone.
The
approach of our law is that one needs to examine the statute in order
to determine whether or not the common law is affected
and if so to
what extent and only to the extent that the statute indeed does so.
The position is that if it can be found that the
common law has been
changed the presumption is that the Legislature sought to change the
common law as little as possible.
This
leads logically to the next premise of the analysis which requires a
Court not to be too hasty to interpret a statute as changing
the
common law. In short, when one looks a statute which it is contended
has changed the common law, one must be in restrictive
mode and it
cannot be presumed that a common law right has been extinguished,
compromised or modified unless one can read from
the provisions of
the statute a clear intention to effect that change.
I
have read the sections to which I have been referred and I am unable
to detect from the provisions in the least degree an intention
which
is aimed at undermining the common law possessory regime. What I do
read from these sections and from the PPA as a whole
is the intention
of the Legislature to introduce a very extensive regulatory regime in
regard to trading in petroleum, including
a regulation, not only of
its distribution but also of the places from which it may be sold. I
do not see a basis provided for
in the PPA to support the contentions
of the respondents.
As
a result of that finding, I am unpersuaded that there is a basis for
the conclusion that the applicant’s possessory rights
are
extinguished.
However,
this is not the first time that this argument has been put before a
Court. The parties themselves have drawn my attention
to two
decisions in this Division. Both are unreported. The first is a
matter in which Bashall AJ gave judgment on
6
June 2013 under case 2012/16333 in the South Gauteng High Court. That
matter is
Engen Petroleum Ltd v Gundu Service Station
CC,
Lokotela Felicia Sebiko
, as the second respondent and BNM
Petroleum Products CC as the third respondent. Subsequent thereto,
Matthee AJ in this Court gave
a judgment on 28 March 2014 under case
2013/20344. He had the benefit of the judgment of Bashall AJ which
dealt with virtually
the identical arguments.
An
examination of these judgments and of the papers put before me in
this matter, which, again, involves Engen Petroleum Ltd and
the
identical standard documentation, demonstrates that the arguments on
the meaning of the PPA which have been articulated before
me, have
been articulated previously before other judges in this Division.
What
Bashall AJ has to say about these arguments can be captured from two
passages which I wish to quote about the contention that
the
provisions of the
Petroleum Products Act have
the effect that
respondents argue for.
The
following appears at page 7 of the judgment of Bashall AJ: “As
to the earlier submissions on licensing issues the respondents
have
misconceived the intention and effect of the licensing provisions of
the Act as amended. The affidavits have laid no basis
for the
contentions advanced. Indeed many of the contentions submitted in the
heads of argument of which but a few I quoted above
have no
foundation in law or fact.”
Later,
in a passage on page 29, having dealt with further arguments he deals
with the contentions advanced to him there in the following
passage:
“
Non constat
, however,
the startling proposition contended for on behalf of the respondents,
there is no warrant therefore. The provisions of
Act 55 of 2003
including section 2 (d) the Charter of the South African Petroleum
and Liquid Fuels Industry in which the Charter,
the applicant, is
itself listed as a participant, all the regulations R286 of 27 March
2006,
let
alone
the original Act
contemplate, countenance or intend a displacement of the applicant’s
rights flowing from the contraction
of real rights vested in it.
The
licensing provisions do not stultify the applicant’s rights nor
bar its entitlement to access to the courts for relief.
It is on
these rights the relief is sought and to which it is on the papers
entitled.” (Italics supplied)
That
learning was available to Matthee AJ. In the subsequent judgment, at
page 7ff, it enjoyed endorsement where Mathee AJ dealt
with virtually
the same argument.
In
substance, the argument before me is no different. What that leads to
is the self-evident conclusion is that even if I were,
as I am not,
impressed by the argument advanced on behalf of the respondents and
were I of the view that there is indeed a proper
basis upon which to
unsuit the applicant I am faced with the fact that two judgments in
this Division have held otherwise. By the
doctrine of precedent I am
not at liberty to ignore those judgments unless I am in a position to
articulate that they are clearly
wrong.
What
precisely is required of a Judge in determining whether another one
or more judgments is clearly wrong is not on the researches,
which I
have conducted, something which has enjoyed any particular
formulation or test. Indeed it has been largely left to the
common
sense of judges to determine what it must be. My sense, based on
common sense I trust, is that it is not open to a Judge,
if he has to
show fidelity to the doctrine or precedent, to depart from an earlier
decision in the Court which is binding on him
unless if it is
possible to articulate that the rationale advanced in support of the
competing proposition is untenable. I do not
propose to give the use
of the word ‘untenable’ any particular context other than
to suggest that it must bear its
ordinary meaning of unsustainable
plainly misconceived or indeed preposterous.
Given
the lengthy and careful judgment given by Bashall AJ dealing with the
very arguments which have been before me I am at pains
to find a
basis to conclude that the rationale he offered for dismissing that
application, as did Matthee AJ in the other matter,
are untenable. In
support of the proposition that these judgments ought to be departed
from as being clearly wrong, several arguments
were advanced; namely,
that they ignored various arguments advanced about section 24 and 25
of the Constitution. The contention
was that there would be an
inequity relating to the goodwill that would be forfeited by a lessee
who would be obliged to vacate
premises on the whim of the head
lessee. In particular, the provisions of section 2A (1), (4) and (5)
were said to be crucial to
the argument that comprised the
locus
standi
of a head lessee in the position of the applicant.
I
am unable to detect in the treatment given to that argument and those
sections in particular, any premise upon which I could conclude
that
either Bashall AJ or Matthee AJ in the two matters they have heard
were clearly wrong. The upshot is that, as alluded to earlier,
even
if I were not myself convinced that the argument was unsustainable it
would not be open to me to find in the face of two competing
judgments that I could hold so.
Having
regard to all of these considerations, in my view, the defence, which
has been offered, to the relief sought must fail. In
consequence of
that, the relief which is sought must be granted. The notice of
motion before me seeks various prayers and an application
has been
made for costs. In my view, the prayers in the notice of motion
paragraph 1, 2, 3, 4 including 4.1, 4.2, 4.3, 4.4 and
paragraph 5
including paragraph 5.1 and 5.2 should be granted. An order is so
made.
_______________________
Roland
Sutherland
Judge
(Edited
30 March 2015)
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