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[2022] ZAECELLC 29
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Total Brite Star Service Station CC v ENSPA Trading Company (Pty) Limited and Others (1661/2021) [2022] ZAECELLC 29 (1 November 2022)
IN
THE HIGH COURT OF SOUTH AFRICA
EASTERN
CAPE DIVISION, EAST LONDON CIRCUIT COURT
REPORTABLE
CASE
NO. 1661/2021
In
the matter between:
TOTAL
BRITE STAR SERVICE STATION
CC
Applicant
and
ENSPA
TRADING COMPANY (PTY) LIMITED
First Respondent
SPARGS
SELLA YE MOTO (PTY) LIMITED
Second Respondent
THE
CONTROLLER OF PETROLEUM PRODUCTS,
EASTERN
CAPE
Third Respondent
THE
MINISTER OF THE DEPARTMENT OF MINERAL
RESOURCES
AND ENERGY
Fourth Respondent
JUDGMENT
LAING J
[1]
This is an application that pertains to the development and operation
of a filling station at Ngcobo in the Eastern Cape.
[2]
The applicant initially launched an application on 3 December 2021
for
an order,
inter alia
, staying the first and second
respondents’ exercise of their rights in terms of the site and
retail licences granted to them
for erven 224, 226 and 228, Ngcobo,
pending the determination of an appeal.
[3]
Subsequently,
the applicant filed an amended application
[1]
on 12 August 2022, on an urgent basis, repeating the relief sought
under the original application but including a prayer for alternative
relief to the effect that the third and fourth respondents’
decisions to grant site and retail licences be reviewed and set
aside. The applicant also sought final interdictory relief against
the first and second respondents. In the alternative, the applicant
sought an interim interdict against the first and second respondents,
pending the finalisation of a review application to be instituted
within 30 days to review and set aside the third and fourth
respondents’ decisions.
[4]
The first and second respondents have opposed the matter.
Background
Applicant’s
case
[5]
It is common cause that the applicant operates a fuel retail business
at erf 259, Ngcobo. The applicant asserts that it has done so for
more than 25 years. It points out that the fuel retail industry
for
the Ngcobo area is over-saturated inasmuch as there is a
proliferation of fuel retailers for a community beset by a stagnant
economy and high unemployment. There are four filling stations within
500 metres of each other, including the first respondent’s
site. To add a further filling station would have a negative impact
on the existing fuel retailers and the viability of their businesses.
[6]
In 2018, the first respondent applied to the third respondent for a
site
licence; the second respondent simultaneously applied for a
retail licence. The applicant objected to the applications, arguing
that they would not promote the transformation of the fuel retail
industry, would not be economically viable, and would prejudice
existing retailers.
[7]
On 13 December 2019, the third respondent notified the first and
second
respondents that their applications had been unsuccessful. The
parties lodged an appeal with the fourth respondent on 14 February
2020 but without informing the applicant. On 16 September 2020, the
fourth respondent referred the matter back to the third respondent
for re-evaluation as a result of new information that the first and
second respondents had supplied on appeal. The third respondent
subsequently granted the applications.
[8]
The applicant only became aware of the third respondent’s
decision
when it observed, on 17 August 2021, that construction of a
filling station had commenced on the first respondent’s site.
Consequently, the applicant requested copies of the applications from
the third and fourth respondents, together with the decisions
made in
relation thereto. The first and second respondents were uncooperative
in this regard.
[9]
The attorneys wrote to the first and second respondents’
attorneys
on 14 September 2021, indicating that the applicant
intended to bring a review application, alternatively to lodge an
appeal against
the third respondent’s decision. They requested
an undertaking that construction would cease, pending the outcome of
such
proceedings. The first and second respondents’ attorneys
refused to provide an undertaking, pointing out that the site
development
was a substantial project and extended to more than just
a filling station.
[10]
On 15 October 2021, the applicant lodged its appeal against the third
respondent’s
decision so as to comply with the 60-day period
stipulated under section 12A of the Petroleum Products Act 120 of
1977 (‘the
PPA’). The grounds of appeal upon which the
applicant relies are that the third respondent could never have been
satisfied
that the proposed filling station would be economically
viable and that it would promote the licensing objectives listed in
terms
of section 2B(2) of the PPA. The third respondent failed to
take the applicant’s objection into account and that the
granting
of the licences would render the applicant’s business
(100% black-owned) unsustainable and would detrimentally affect other
fuel retailers.
[11]
In its
supplementary grounds of appeal, the applicant indicated that the
third and fourth respondents ought to have considered the
draft
guidelines for the issuing of new site and retail licences, which
included the determination of the need for a new filling
station.
This should have been based on the volumes of fuel sold by all
existing fuel retailers over a three-year period. The applicant
contends that the third respondent relied on outdated and limited
information. If a proper investigation had been carried out,
then the
third respondent would never have approved the applications.
Furthermore, the applicant asserts that the third respondent’s
unsubstantiated view that existing fuel retailers would not easily
accommodate an increase in demand by reason of the development
of a
new township with RDP housing
[2]
was without merit; the new township was never established because the
local community objected thereto. In any event, alleges the
applicant, there was no evidence that a new township would have ever
improved the local economy. There would be an overall reduction
in
the volumes sold by existing fuel retailers, to well below the market
norm of 300,000 litres per month. In short, argues the
applicant, the
absence of a fully motivated socio-economic impact study meant that
there had been no justifiable basis upon which
the applications could
have been granted.
The
first and second respondents’ case
[12]
In their answering papers, the first and second respondents assert
that the third respondent
issued site and retail licences to them on
21 April 2021. Moreover, the first respondent is the registered owner
of erven 224,
226 and 228, Ngcobo, and the local municipality had
already approved building plans for the proposed development. The
Spargs Group,
which included the first and second respondents, had
been trading in the former Transkei for at least 50 years and had
decided
to invest substantially in the Ngcobo area after having
assessed market needs. The new development would be situated along
the
R61, which was the main road between Ngcobo and Komani
(Queenstown). It occupied an area of approximately 49,000 m² and
consisted
of a 24-hour Spar supermarket, a liquor store, a bakery, a
tyre fitment centre, a clothing store, as well as a filling station
with a truck-stop to accommodate large trucks and their drivers
overnight on secure premises. The estimated cost of the project
was R
125 million; construction costs incurred to date had already exceeded
R 11 million. It was anticipated that the project would
create at
least 140 permanent jobs. Furthermore, it had the support of the
local municipality, taxi associations, and the community
in general.
[13]
The first and second respondents refer to a socio-economic impact
study that was completed
on 18 November 2021 and contend that the
project will promote the efficient retailing of petroleum products,
including diesel,
gas and paraffin. By reason of the multi-faceted
nature of the project, the development was commercially viable; it
did not simply
entail the construction and operation of a filling
station. Consequently, argue the first and second respondents, the
project met
the objectives stipulated under section 2B(2) of the PPA.
[14]
They go on to assert that the applicant and other objectors were
informed of their appeal
when their initial applications were
refused. No-one opposed the appeal.
[15]
The first and second respondents contend that the suspension of the
project would result
in substantially increased expenditure by reason
of claims for the costs of standing time and claims for the extension
of time
for project completion. The balance of convenience did not
favour the applicant.
[16]
In response
to the applicant, the first and second respondents indicate that if
the licences were to be revoked or withdrawn, then
they would not
trade in fuel or operate a filling station. They confirm that they
would not permit trading in fuel from the premises
until the outcome
of the appeal had been determined.
[3]
However, the applicant would not suffer any irreparable harm were the
project, consisting of a multi-faceted development, to be
completed.
Recent
developments
[17]
The applicant filed an ‘amended notice of motion’ on 12
August 2022. This was
done on an urgent basis. The supporting
affidavit thereto emphasises that at the time that the applicant
first launched its application,
on 3 December 2021, the first and
second respondents’ filling station was still under
construction, it was not yet operational.
Their answering papers,
alleges the applicant, contain the following undertaking:
‘
[s]ave to state
that the First and Second Respondents will not permit any trading in
fuel from the premises until the outcome of
the present Appeal is
determined, the relief claimed is opposed.’
[18]
Notwithstanding, the first and second respondents have commenced with
the operation of
the filling station. This, avers the applicant,
renders the application urgent. The applicant also argues for the
amendment of
its notice of motion to accommodate review proceedings
against the third and fourth respondents.
[19]
In
response, the first and second respondents indicate that, by 18 July
2022, they had completed the development of the site and
had
commenced retailing fuel. They raise the point that the amended
notice of motion was not preceded by a notice in terms of rule
28 of
the Uniform Rules of Court, which led to their delivery of a notice
in terms of rule 30.
[4]
They
also take issue with: the urgency claimed by the applicant; the lack
of service on the third and fourth respondents; the failure
to have
brought the application in accordance with rule 53, such that neither
the record of nor the reasons for the decisions in
question have been
placed before court; non-compliance with the 180-day time limit
stipulated under section 7 of the Promotion
of Administrative Justice
Act 3 of 2000 (‘PAJA’); and the failure to have exhausted
the internal remedy available in
terms of the PPA.
[20]
The first and second respondents emphasize that they already hold
valid site and retail
licences, which permit them to trade, and that
they have already spent a considerable amount of money to bring the
project to fruition.
A total of 21 individuals have been employed for
the operation of the filling station; in addition, two security
officers have
been employed. The first and second respondents and the
above employees would suffer considerable prejudice if the relief
sought
by the applicant was granted.
Issues
to be decided
[21]
The court must decide the following issues: (a) the staying of the
first and second respondents’
exercise of their rights with
regard to the third respondent’s granting of site and retail
licences, pending determination
of the applicant’s appeal to
the fourth respondent; (b) the interdicting of further construction
activities; (c) the suspension
of the third respondent’s
decision, pending the determination of the appeal; and (d) the
granting of alternative relief to
the applicant.
[22]
As a starting point, it is necessary to consider the alleged urgency
of the application,
as well as the applicant’s purported
amendment of its notice of motion.
Urgency
and applicant’s amendment
[23]
The basis
for the applicant’s urgent filing of an ‘amended notice
of motion’ was ostensibly its realisation, between
the dates of
18 and 27 July 2022,
[5]
that the
first and second respondents had commenced with the retailing of fuel
from the premises, notwithstanding the pending appeal
and their
previous undertaking.
[24]
Reliance on the latter to assert urgency is, however, not entirely
reasonable. The first
and second respondents indicated, as early as 7
March 2022, that there were errors in their answering papers that
they sought to
correct; these included the undertaking itself, i.e.
that they would not permit any trading in fuel from the premises
until the
appeal had been determined. They made it clear in a
supplementary affidavit (accompanied by their attorney’s
confirmatory
affidavit) that they would indeed trade for as long as
they held valid and lawful site and retail licences and that they had
instructed
their attorney to make the necessary corrections. An
interlocutory application to that effect was filed. The applicant
opposed
the application on 22 March 2022 and gave notice of an
irregular step in terms of rule 30(2)(b), arguing that the first and
second
respondents had not obtained the leave of the court to deliver
further affidavits. The first and second respondents consequently
withdrew their application a few days later, only to make a further
attempt on 23 May 2022. The applicant opposed the application
again
on 30 May 2022, delivering a notice in terms of both rules 30A and
30(2)(b) on 23 June 2022. This resulted in the first and
second
respondents’ filing a notice of intention to amend its
application on 4 August 2022.
[25]
From the above chronology, it would be difficult to dispute that the
first and second respondents
have consistently demonstrated their
intention to correct their answering papers. The applicant would have
known, for several months,
that the initial undertaking was no longer
reliable. It is simply implausible for the applicant to suggest that
it only became
aware of the true situation at a much later stage. As
the first and second respondents have pointed out, the applicant
would have
understood that construction activities at the premises,
situated a mere 500 metres away, had not ceased; the risk of the
first
and second respondents’ commencement of trading was real.
[26]
Consequently, if the applicant had been concerned about the impact of
the first and second
respondents’ activities, notwithstanding
the appeal, then it would have been incumbent on it to have set down
the application
for hearing at a much earlier date. There was no
proper basis upon which the applicant could have initiated the
present proceedings
in accordance with such abridged timeframes.
[27]
In the
absence of the requisite degree of urgency, a court can decline to
exercise the powers available in terms of the relevant
procedure,
i.e. rule 6(12)(a). The matter would not be properly before the court
and the appropriate order would be to strike it
from the roll. See
Luna
Meubel Vervaardigers (Edms) Bpk v Makin (t/a Makin’s Furniture
Manufacturers)
;
[6]
and
Commissioner,
South African Revenue Service v Hawker Air Services (Pty) Ltd;
Commissioner, South African Revenue Service v Hawker
Aviation
Partnership
.
[7]
The court, nevertheless, has a discretion under rule 6(12)(a), to
dispense with the usual forms and service and to dispose of the
matter in such manner and in accordance with such procedure as it
deems fit, provided that the procedure in question ‘shall
as
far as practicable be in terms of these rules’. That obligation
must be carried out in accordance with the attitude of
the court
concerning which deviations it will tolerate in a specific case. If a
deviation is to be permitted, then the extent thereof
will depend on
the circumstances. See
Caledon
Street Restaurants CC v D’ Aviera
.
[8]
[28]
Here, the parties have already filed founding, answering, replying,
and supplementary papers.
Counsel have already submitted heads of
argument and the court has already heard full submissions on all the
issues. It would serve
no purpose to strike the matter from the roll;
the court is satisfied that it would not prejudice the first and
second respondents
for the matter to be adjudicated.
[29]
This having
been said, it is necessary to emphasise that there are limits to
which the court can permit a deviation from the usual
forms and
service. The extent to which such tolerance extends depends upon the
circumstances and is something that remains within
the discretion of
the court, to be exercised according to the contingencies of the
matter at hand. That is the risk that a party
takes when invoking
urgency. More will be said about this later in relation to the relief
sought against the third and fourth respondents.
[9]
[30]
It is
necessary, at this stage, to consider whether the applicant has
effectively filed an amended notice of motion. At a practical
level,
a court will generally allow an amendment unless it is marked by
mala
fide
or
causes prejudice to the other side which cannot be cured by an
appropriate order for costs or cannot place the parties in the
position that they were when the pleading was originally filed. See
Moolman
v Estate Moolman and another
.
[10]
The test, as enunciated in
Affordable
Medicines Trust and others v Minister of Health of RSA and another
,
is what the interests of justice demand.
[11]
[31]
The only basis for the first and second respondents’ opposition
to the proposed amendment
is that the applicant failed to give notice
thereof in terms of rule 28, thereby rendering it an irregular step.
No clear prejudice
has been caused and the point was not pursued
vigorously in argument. The amendments sought by the applicant are
closely intertwined
with the issues that informed the original
application and it would be in the interests of justice to allow the
amendment so that
the matter can be dealt with
in toto
rather
than on a piecemeal basis.
[32]
The applicant’s supplementary affidavit underpins the amended
notice of motion and
is necessary for the proper consideration of the
matter. There is no reason why not to grant the leave required.
[33]
Whether the applicant has made a case for the staying of the first
and second respondents’
rights and the interdicting of further
construction activities will be considered next.
Staying
of rights and interdicting of construction activities
[34]
The applicant seeks an order staying the implementation and exercise
of the rights attached
to the site and retail licences granted to the
first and second respondents, pending the determination of the
appeal. It also seeks
an order interdicting the development or
carrying out of any construction activities on the site for purposes
of a fuel retail
business.
[35]
In effect,
the applicant seeks an interim interdict, as evident from its
answering papers. The requirements for an interim interdict
are
well-known and consist of the following: a
prima
facie
right; a well-grounded apprehension of irreparable harm if the
interim relief is not granted and the ultimate relief is eventually
granted; a balance of convenience in favour of the granting of the
interim relief; and the absence of any other satisfactory remedy.
[12]
[36]
From its
founding papers, the applicant asserts that, as a properly licensed
fuel retailer, it has a right to prevent unlawful activities
on fuel
retail sites in proximity to its own site. The difficulty with this,
however, is that it is common cause that the first
and second
respondents already hold site and retail licences. Until such time as
the decision to grant such licences is reviewed
and set aside, it
remains extant and gives rise to legal consequences. In the seminal
case of
Oudekraal
Estates (Pty) Ltd v City of Cape Town and others
,
[13]
Howie P and Nugent JA held, at paragraph [26], that:
‘…
until the
Administrator’s approval (and thus also the consequences of the
approval) is set aside by a court in proceedings
for judicial review
it exists in fact and it has legal consequences that cannot simply be
overlooked. The proper functioning of
a modern state would be
considerably compromised if all the administrative facts could be
given effect to or ignored depending
upon the view the subject takes
of the validity of the act in question. No doubt it is for this
reason that our law has always
recognised that even an unlawful
administrative act is capable of producing legally valid consequences
or so long as the unlawful
act is not set aside.’
[37]
Admittedly, whether the applicant’s lodging of an appeal to the
fourth respondent
triggers the application of the rule of automatic
suspension in relation to the effect of the third respondent’s
decision
to grant the licences is an issue that must still be
addressed.
[38]
It is, notwithstanding, far from apparent that the applicant has
demonstrated a well-grounded
apprehension of irreparable harm. It
alleges that the first and second respondents’ completion of
construction and operation
of a filling station will have a direct
and detrimental impact on the applicant’s business. To that
effect, the applicant
asserts that the only means by which the new
filling station would survive would be by enticing customers away
from neighbouring
filling stations; the local economy in the Ngcobo
area would not sustain a new business. The applicant goes on to
assert, without
substantiation, that it would suffer a reduction in
sales by 120,000 litres per month, below the accepted benchmark of
300,000
litres per month. How the applicant has calculated this is
not clear.
[39]
Moreover,
it contends that a key motivating factor for the granting of the
licences was the imperative to cater for the needs of
a new township
that was to have been developed with RDP housing. This has never
materialised. Consequently, argues the applicant,
in the absence of
any increase in market demand,
[14]
the first and second respondents’ supply of fuel, projected to
be 300,000 litres per month, would only be sustainable were
the
remaining filling stations to experience a reduction in sales by an
average of 100,000 litres each per month.
[15]
[40]
What is missing from the applicant’s argument, however, is a
compelling set of facts
upon which to anchor its assertions. These
remain speculative at best until the applicant can point to a proper
investigation and
comparison of existing and likely sales.
[41]
Admittedly, the applicant refers to a report prepared by an analyst
for the Department
of Mineral Resources and Energy, a Ms Oniccah
Mzolo, to conclude that the operation of the new filling station
would result in
the decrease in sales for the remaining filling
stations to an intolerable level, viz. 267,505 litres per month on
average. In
its founding papers, however, the applicant criticises Ms
Mzolo’s report for using outdated and limited figures; they
pertain
only to a single year, 2017, which was some four years prior
to her recommendation to the third respondent that the licences be
approved. The applicant cannot, in the same breath, rely on the above
figures to support its contentions that it will experience
a dramatic
reduction in sales.
[42]
The addition of a multi-faceted development to the Ngcobo market may
yet have a beneficial
impact on the local economy and the applicant’s
business by implication. The first and second respondents’
project
is not limited to a filling station but includes a 24-hour
Spar supermarket, a liquor store, a bakery, a tyre fitment centre, a
clothing store, as well as a truck-stop. It is not unreasonable to
argue that the development would tend to attract consumers from
many
of the surrounding areas who would, quite feasibly, purchase fuel
from the remaining filling stations, situated close to the
first and
second respondents’ site. A rising tide lifts all boats.
[43]
Overall, the above scenario has not been adequately addressed by the
applicant. It has
made statements that are general in nature and not
tethered to any careful analysis of the possible effect of the
project on its
business. The basis for the applicant’s
apprehension of irreparable harm cannot, in any way, be viewed as
well-grounded.
[44]
In addition, the applicant initially asserted in its founding papers
that the balance of
convenience did not favour the first and second
respondents inasmuch as construction had only just commenced. That
was the position
some eleven months ago. It is not disputed that,
subsequently, the first and second respondents have made substantial
progress
with the project and are already trading. A considerable
amount of money has been spent and the first and second respondents
have
employed 21 staff to operate the new filling station, and two
security officers. Their continued employment will be placed in
jeopardy
if interim relief is granted. The applicant has simply
failed to deal with this aspect.
[45]
The court,
ultimately, is not persuaded that the applicant has demonstrated a
prima
facie
right,
[16]
a well-grounded
apprehension of irreparable harm, or that the balance of convenience
lies in its favour.
[46]
The applicant, notwithstanding, changed tack somewhat in argument. It
contends that it
was not necessary for it to have applied for the
staying of the first and second respondents’ rights, asserting
that its
lodging of the appeal automatically suspended the
implementation of the third respondent’s decision and the
validity of the
site and retail licences. This argument will be
explored further in the paragraphs that follow.
Suspension
of decision and validity of the licences
[47]
It is common cause that the applicant has lodged an appeal with the
fourth respondent against
the third respondent’s decision. The
fourth respondent has yet to decide the appeal.
[48]
The applicant argues that the lodging of an appeal against
administrative action automatically
suspends the operation of the
decision in question. The first and second respondents say that this
depends upon the legislation
involved. In that regard, section 12A of
the PPA stipulates that:
‘
(1)
Any person directly affected by a decision of the Controller of
Petroleum Products may, notwithstanding any
other rights that such a
person may have, appeal to the Minister against such decision.
(2)
An appeal in terms of paragraph (a) shall be lodged within 60 days
after such decision has been made
known to the affected person and
shall be accompanied by–
(a)
a written explanation setting out the nature of the appeal;
(b)
any documentary evidence upon which the appeal is based.
(3)
The Minister shall consider the appeal, and shall give his or her
decision thereon, together with written
reasons therefor, within the
period specified in the regulations.’
[49]
The first and second respondents assert that the appeal contemplated
under the PPA is an
internal remedy and amounts to the
reconsideration of the matter by the fourth respondent; he may take
into account additional
information that did not form part of the
initial application. This would constitute a ‘wide’ (as
opposed to ‘narrow’)
appeal. In the absence of any
provision in the PPA to the effect that the operation of the decision
is suspended, pending the outcome
of the appeal, the first and second
respondents contend that there is no merit in the applicant’s
argument.
[50]
There does not appear to be any settled authority on the subject, no
definitive pronouncement
has been made by either the Constitutional
Court or the Supreme Court of Appeal. Nevertheless, an investigation
of the case law
reveals that the courts have adopted an approach that
seems to support the application of the common law rule of automatic
suspension
unless the legislation in question indicates the opposite.
[51]
In
Dennis
v Garment Workers’ Union, Cape Peninsula
,
[17]
the court held that the decision of a domestic tribunal in a
disciplinary matter had to be given effect, pending an appeal, where
the constitution of the trade union that made provision for such
matters did not stipulate otherwise Some years later, in
Leburu
en andere v Voorsitter, Nasionale Vervoerkommissie, en andere
,
[18]
the court found that the provisions of the Road Transportation Act 74
of 1977 clearly indicated that the mere noting of an appeal
against
an act, instruction or decision of a local road transportation board
did not result in the automatic suspension thereof;
the applicable
legislation conferred a discretion on the National Transport
Commission to grant or refuse an application for such
suspension. At
about the same time, the court in
Marinpine
Transport (Pty) Ltd v Local Road Transportation Board,
Pietermaritzburg, and another
[19]
observed that execution before appeal was seldom permitted; it was a
time-honoured principle that, in the absence of extraordinary
circumstances, a court would always maintain the
status
quo
until the last word had been spoken by the final court of appeal.
[52]
The
principle found relevance, post-1994, in
Metcash
Trading Ltd v Commissioner for the South African Revenue Service and
another
,
[20]
where the Constitutional Court dealt with the provisions of the
Value-Added Tax Act 89 of 1991. The court upheld section 36(1),
which
expressly stipulated that the obligation to pay tax was not
suspended, pending an appeal, unless the Commissioner directed
as
much.
[21]
The same approach
was followed in
De
Beer v Raad van Gesondheidsberoepe van Suid-Afrika
,
[22]
concerning the provisions of the Health Professions Act 56 of 1974.
The court upheld section 42(1A) thereof, to the effect that
the
decision to remove a medical practitioner’s name from the roll
or to suspend him or her from practice remained effective
until any
appeal lodged in relation thereto had been heard.
[53]
The
principle was subjected to careful scrutiny by the court in
Max
v Independent Democrats and others
.
[23]
To that effect, the court found that there were good reasons why the
rule of automatic suspension ought to apply;
inter
alia
,
there was nothing in the applicable legislation or the code of
conduct for the political party involved that reversed the rule
or
suggested that it should not be applied. The decision was cited with
approval in
Morrison
v City of Johannesburg and others
,
[24]
where the court held that:
‘
[i]t is trite that
in judicial proceedings the noting of an appeal has the effect of
suspending the order appealed against pending
the outcome of the
appeal before a court of appeal. The rationale of the common law rule
is that the status quo between the parties
should be maintained until
the adjudication process is complete and a final decision reached.
The law hopes in this way to avoid
the potentiality of prejudice
caused by giving effect to an order or decision that may be reversed.
However, in administrative
proceedings there is no similar rule of
the common law which suspends any administrative decision once an
administrative appeal
has been noted. Whether the noting of an
administrative appeal has the effect of suspending the administrative
decision depends
upon the interpretation of the provision bestowing
the statutory right of appeal. According to Baxter,
Administrative
Law
(Juta) 381, the common-law principle of suspension can
constitute no more than a presumption in the case of administrative
decisions,
and this presumption may be negatived by the implications
of the statute. He adds though that the presumption appears
nevertheless
to be a strong one.’
[54]
The court went on to find that section 139(1) of the Town-Planning
and Townships Ordinance
15 of 1986 conferred upon an aggrieved party
a right of reconsideration of a decision taken by a local authority
about building
within a restricted area. The right would be rendered
nugatory where an appeal against such a decision had no suspensive
effect.
[55]
More
recently, the subject received attention in
Cotty
and others v Registrar of the Council for Medical Schemes and
others
.
[25]
The court dealt with the
section 50
of the
Medical Schemes Act 131 of
1998
, which provided for a ‘wide’ administrative appeal
in relation to a decision made by the registrar; however, the
provisions
in question did not expressly indicate whether the lodging
of an appeal suspended any such decision. After considering the case
law, the court stated that:
‘…
there is a
common law principle which provides that, subject always to the
applicable legislation concerned, an administrative appeal
suspends
the decision which is the subject of the appeal.’
[56]
The courts in
Max
,
Morrison
, and
Cotty
, referred
extensively to academic texts. In that regard, reliance was placed
upon Baxter, who writes:
‘
[i]n the case of
private disputes the effect at common law of noting an appeal is to
suspend the operation of the decision appealed
against. But the right
of appeal against decisions taken in terms of statutory powers is
dependent upon the enabling statute. The
common-law principle can
constitute no more than a presumption in the case of administrative
decisions, and this presumption may
well be negatived by the
implications of the statute. Take the Road Transportation Act, for
example. A dissatisfied party may appeal
to the NTC against the
decision of a local road transportation board. Application may also
be made to the chairman of the NTC who
has the power to suspend the
decision of the local board pending the outcome of the appeal. The
fact that such power was conferred
on the chairman has led a court to
the conclusion that the common-law principle (that a decision
appealed against is automatically
suspended) could not have been
intended to apply in cases where such a suspension order is not made-
for otherwise there would
be no necessity for conferring the
suspending power on the chairman.’
[26]
[57]
The courts also quote De Ville, who writes:
‘
[w]here an appeal
is allowed against an administrative decision the decision appealed
against will (unless the statute in question
provides otherwise) take
effect only once the period for appeal has expired (and the person
affected has not made use of the opportunity)
or the decision has
been confirmed on appeal (where the person affected makes use of the
opportunity to appeal).
[27]
[58]
From the above case law and academic texts, it can be said that there
is a rebuttable presumption
that the common law rule of automatic
suspension applies when an appeal is lodged against an administrative
decision. The presumption
can be rebutted to the extent that the
empowering legislation indicates otherwise.
[59]
The principle must inform the adjudication of the present dispute. It
is not disputed by
the first and second respondents that the
applicant lodged its appeal on 15 October 2021 in accordance with the
provisions of section
12A of the PPA. The legislation in question is
silent, however, about whether the third respondent’s decision
is suspended,
pending the determination of an appeal. Viewed as a
whole, the PPA provides no indication at all about the effect of an
appeal
on the decision. There is nothing to rebut the presumption
that the common law rule of automatic suspension should not be
applied.
[60]
The outcome of the above analysis is that the effect of the third
respondent’s decision
to grant site and retail licences to the
first and second respondents must be regarded as having been
suspended when the applicant
lodged its appeal. At a practical level,
this means that the first and second respondents are unable to
exercise their rights until
the appeal has run its course. There was,
ultimately, no need for the applicant to have sought interdictory
relief.
[61]
Having said
that, it is important to observe that the fourth respondent was
afforded 90 days within which to decide the appeal,
i.e. by 14
January 2022.
[28]
It is
unacceptable that this has yet to be accomplished. The delay creates
obvious prejudice for the parties and there may indeed
be remedies
available under the provisions of PAJA; nevertheless, the parties’
own dilatoriness in not challenging the fourth
respondent’s
failure to take a decision will need to be addressed. That is not
before this court.
[62]
The validity of the site and retail licences remains intact, subject
of course to any findings
that a court may yet make with regard to
the possible review and setting aside of the decision taken by the
third respondent. The
suspension of the effect thereof does not
affect the validity of the licences in question.
[63]
What remains to be considered is the alternative relief sought by the
applicant, to be
discussed below.
Alternative
relief
[64]
The applicant seeks the review and setting aside of the third
respondent’s decision
to grant site and retail licences, and
the fourth respondent’s decision to remit the matter back to
the third respondent.
Numerous points have been taken by the first
and second respondent, including the applicant’s failure to
have complied with
the 180-day time limit stipulated under section 7
of PAJA and the failure to have exhausted the internal remedy
available in terms
of the PPA, i.e. the appeal. There is merit in
these.
[65]
However, the most serious shortcoming for immediate purposes is the
applicant’s failure
to have brought the application in
accordance with rule 53. The extreme haste with which the applicant
proceeded in bringing the
matter to court meant that neither the
record of the third and fourth respondents’ decisions nor the
reasons therefor have
been placed before court. The applicant’s
conduct with regard to the alleged urgency of the matter has already
been discussed
and criticised. It cannot reasonably have been
expected of the third and fourth respondents to have compiled a
record and their
reasons for the decisions upon merely a few days’
notice, especially in light of the history of the dispute. The
timeframes
laid down in rule 53 are there to allow the parties (and
the court) to understand properly the basis upon which an
administrative
decision was taken; they also provide an opportunity
to establish the ambit of the review and to identify the key issues
involved.
[66]
In the present matter, there is no record. There are no reasons. It
cannot be expected
of the court to piece these together from the not
inconsiderable bundle of papers filed by the parties, especially
where the application
was brought in such undue haste. No basis
exists upon which the court can embark upon the review sought by the
applicant.
[67]
The applicant also seeks final interdictory relief as a consequence
of the review and setting
aside of the decisions in question.
Patently, this relief is not available in the circumstances.
[68]
Finally, the applicant seeks interim relief, preventing the first and
second respondents
from exercising any rights in terms of the site
and retail licences, pending the finalisation of a review application
to be launched
within 30 days for the review and setting aside of the
decisions of the third and fourth respondents. The court has already
dealt
with the question of interim relief and held that the applicant
has failed to satisfy the requirements therefor. In any event, the
finding that the applicant’s lodging of its appeal has resulted
in the suspension of the third respondent’s decision
to grant
the licences obviates the need for any such relief.
Relief
and order
[69]
The court has considered the facts placed before it and the arguments
made in relation
to the staying of the first and second respondents’
exercise of their rights and the interdicting of further construction
activities. The applicant has not satisfied the requirements for the
granting of either interim or final relief. Furthermore, the
applicant has not persuaded the court that it can embark upon the
review and setting aside of the decisions in question without
a
proper record and reasons, as envisaged under rule 53.
[70]
Notwithstanding, the court accepts that the nature of the matter
entails the application
of the rule of automatic suspension with
regard to the effect of the third respondent’s decision. This
will hold practical
implications for the first and second
respondents’ business activities, which will need to be
managed.
[71]
The only aspect still to be considered is that of costs. At the end
of the matter, the
applicant could be said to have been successful in
its application to halt the first and second respondents’
operation of
a filling station, pending the outcome of the appeal. It
has, however, been substantially unsuccessful in its efforts to
obtain
the interdictory or alternative relief set out in its amended
notice of motion. Moreover, its reliance on the alleged urgency of
the matter and its stipulation of a wholly unreasonable timeframe for
the respondents’ filing of answering papers verges
on the abuse
of the process available in terms of rule 6(12). It has also failed
to adopt the procedure prescribed under rule 53
for the review
application that was envisaged. The question must be raised, too,
about why the applicant has not, to all intent
and purposes, taken
decisive steps to call the fourth respondent to account. More than a
year has passed since the lodging of the
appeal. It would be
inappropriate, overall, for costs to be awarded to the applicant.
[72]
In the circumstances, the following order is made:
(a)
the effect of the decision of the third respondent to grant site and
retail licences to
the first and second respondents, in relation to
erven 224, 226, and 228, Ngcobo, is declared to have been suspended,
pending the
determination of the applicant’s appeal to the
fourth respondent; and
(b)
no order is made in relation to costs.
JGA
LAING
JUDGE
OF THE HIGH COURT
APPEARANCE
For the
applicant:
Adv Venter with Adv Kotzé, instructed by IC Clark Inc., East
London.
For
the 1
st
and 2
nd
respondents:
Adv Watt, instructed by Drake Flemmer & Orsmond Inc, East London.
Date
of hearing:
23 August 2022
Date
of delivery of judgment:
01 November 2022
[1]
It
is debatable whether the subsequent application was properly
amended, as shall be discussed.
[2]
The
reference to ‘RDP housing’ is a reference to the
Reconstruction and Development Programme that was initiated by
the
post-1994 South African government to address various socio-economic
problems, including,
inter
alia
,
the lack of access to suitable housing.
[3]
The
first and second respondents later sought to correct this, only to
be met with strenuous opposition on the part of the applicant.
[4]
Rule
28 deals with amendments to pleadings and documents, rule 30
pertains to irregular proceedings.
[5]
The
first and second respondents confirm that they commenced trading on
18 July 2022; the applicant’s attorneys issued a
letter of
demand on 27 July 2022.
[6]
1977 (4) SA 135
(W), at 139F-140A.
[7]
[2006] ZASCA 51
;
2006 (4) SA 292
(SCA), at 299H-300A.
[8]
[1998] JOL 1832
(SE), at 7-8.
[9]
The
applicant seeks, in terms of its amended notice of motion, the
review and setting aside of the decisions made by the third
and
fourth respondents. Such relief did not form part of the original
application.
[10]
1927
CPD 27
, at 29.
[11]
[2005] ZACC 3
;
2005 (6) BCLR 529
(CC), at paragraph [9].
[12]
Setlogelo
v Setlogelo
1914
AD 221
, at 227. The principles have been affirmed in a long line of
cases that have followed, including, recently,
Tshwane
City v Afriforum
2016 (6) SA 279
(CC), at 298F-306B; and
National
Commissioner of Police v Gun Owners South Africa
2020 (6) SA 69
(SCA), at paragraph [36].
[13]
[2004] 3 All SA 1
(SCA).
[14]
If
the planned township has never been established, then no additional
demand for fuel has been created. The anticipation of such
demand,
argues the applicant, had comprised a central component of the first
and second respondents’ application for the
granting of the
site and retail licences.
[15]
The addition of 300,000 litres to the overall supply, where demand
remained constant, would need to be accommodated by a corresponding
reduction in sales by the other three suppliers (including the
applicant), i.e. 300,000 / 3 = 100,000 litres each.
[16]
This
must, however, be qualified by the possible merits of the
applicant’s argument that the rule of automatic suspension
applies to the third respondent’s decision to grant the
licences, as will be discussed further.
[17]
[1955]
1 All SA 68
(C), at 73.
[18]
1983 (4) SA 89
(T); at the headnote thereto, 89.
[19]
1984 (1) SA 230
(N), at 232.
[20]
2001 (1) BCLR 1
(CC), at paragraphs [36] – [38].
[21]
In doing so, t
he
Constitutional Court gave recognition to the ‘pay now, argue
later’ approach adopted in many other jurisdictions.
[22]
2004 (3) BCLR 284
(T), at 290-1.
[23]
2006 (3) SA 112
(C), at 119-20.
[24]
[2014] 2 All SA 100
(GNP), at paragraph [28].
[25]
[2021] 2 All SA 793
(GP), at paragraph [64].
[26]
LG
Baxter,
Administrative
Law
(Juta, 1984), at 381.
[27]
J
de Ville,
Judicial
Review of Administrative Action in South Africa
(LexisNexis Butterworths, 2003), at 331.
[28]
See
regulation 33, published in terms of GNR 286 on 27 March 2006:
Regulations regarding Petroleum Products Site and Retail Licences.