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[2021] ZAGPJHC 527
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Cato Ridge Gas Company (Pty) Limited v BP Southern Africa (Pty) Limited (2021/47033) [2021] ZAGPJHC 527 (12 October 2021)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, JOHANNESBURG
Case
No.: 2021/47033
REPORTABLE:
No
OF
INTEREST TO OTHER JUDGES: No
In
the matter between:
CATO RIDGE GAS COMPANY
(PTY) LIMITED
Applicant
and
BP
SOUTHERN AFRICA (PTY)
LIMITED
Respondent
JUDGMENT
This
judgment is handed down electronically by circulation to the parties’
or their legal representatives by email (as the
case may be) and
uploading it to the electronic file of this matter on CaseLines.
Gilbert
AJ:
1.
The applicant as lessee and franchisee
conducts a flagship service station and ancillary business on the N3
Highway, North bound,
Cato Ridge, KwaZulu-Natal in terms of a lease
agreement and a franchise agreement with the respondent. The
applicant seeks urgent
interim relief primarily directed at
interdicting the respondent as lessor and franchisor from revamping
and/or refurbishing and/or
altering the leased premises, which
consists of the petrol forecourt, a convenience store and restaurant
premises. The respondent
intends commencing those renovations as soon
as possible so as to complete them by the Christmas festive season
and has delayed
doing so until 18 October 2021 to facilitate the
determination of these urgent court proceedings, having previously
indicated
that it intended commencing renovations from 10 October
2021. The applicant accordingly approached this court on an urgent
basis because if it does not obtain the interim interdict that it
seeks, those renovations will commence, disrupting its use of
the
leased premises.
2.
Both in the papers and during argument a
variety of issues arose, some of which are more pertinent than
others. I have been assisted
by the informative arguments made by the
respective counsel. The parties require an urgent determination of
these proceedings so
as to arrange their affairs. This precludes me
from preparing a more elegantly crafted judgment than might otherwise
have been
the case.
3.
On 10 September 2021, contractors arrived
at the leased premises in preparation for the commencement of
renovations in early October
2021. This alerted the applicant to the
imminent renovations. Although the applicant’s tenure of the
leased premises has
been on a month-to-month basis from around
February 2020 (before then the applicant enjoyed occupation of the
premises under a
long term lease), and the applicant was alive to the
reality that at some point the respondent as lessor and franchisor
would seek
to make renovations, it was only on 10 September 2021
when this became imminent. Those contractors returned again on
15 September
2021. The applicant’s attorneys addressed
several items of correspondence to the respondent and its attorneys,
demanding
undertakings that the renovations would not commence. I do
not propose dealing with all these items of the correspondence.
Reference
to some items will suffice.
4.
On 15 September 2021 the applicant’s
attorneys addressed a letter to the respondent’s attorneys
recording that
third party contractors had arrived on site and had
informed the applicant that they intended commencing renovations on
1 October 2021,
and that the applicant was dissatisfied
with this state of affairs. The letter demanded an undertaking that
these renovations would
not take place until the applicant had
transferred ownership and possession of its business conducted from
the leased premises
to a new owner, alternatively until end of an
anticipated mediation process, and that failing an undertaking urgent
interdictory
proceedings would be launched.
5.
On 17 September 2021, the respondent’s
attorneys reverted stating that as the respondent was a large
corporate, it needed
time to take instructions and that it would
endeavour to do so as soon as possible, and hopefully by Monday,
20 September 2021.
That date arrived, on which the
respondent’s attorneys indicated that their client still needed
more time to consult internally
in relation to the issues raised by
the applicant’s attorney in its letter, and proposed responding
more substantively
to the issues by Monday, 27 September 2021.
This would cause a delay, at the request of the respondent, of a
week. The
respondent further recorded in that reply that no
refurbishment or revamp would then take place before 11 October
2021.
6.
The applicant’s long-term lease
agreement terminated by the effluxion of time by about February 2020,
the respondent declining
to renew the lease. This meant that a new
operator of the forecourt and related business would have to be
installed in the leased
premises, after concluding its own lease and
franchise agreements with the respondent and having purchased the
applicant’s
business. The applicant is permitted to sell its
business conducted on the respondent’s property but the
purchaser must be
approved by the respondent given the nature of the
business, which is to conduct a BP-branded service station franchise.
But this
would take time and so the parties accepted that the
applicant would remain in occupation of the leased premises on a
month-to-month
basis and continue to conduct the business.
7.
The applicant proceeded to find a
prospective purchaser for its business. But the respondent declined
to consent to that prospective
purchaser, for various reasons. This
resulted in dissatisfaction between the parties as to the potential
sale and transfer of the
applicant’s business to a new
purchaser, including the identification of a prospective purchaser
that was acceptable to the
respondent. This state of affairs would
endure from at least the end of the long-term lease until shortly
before the launch of
these proceedings.
8.
During this period, pursuant to a consent
agreement concluded after mediation proceedings, a process was agreed
between the applicant
and the respondent for purposes of identifying
and sourcing a satisfactory purchaser for the applicant’s
business and who
would be acceptable to the respondent as the new
lessee and franchisee. Although this process under the consent
agreement too proved
to be problematic, the respondent was ultimately
able to source an acceptable purchaser for the applicant’s
business on 23 September
2021 for a purchase consideration of
some R41.1 million, which appears to be acceptable to the
applicant. The applicant and
that prospective purchaser as identified
by the respondent are presently in negotiations, it would appear. But
the applicant did
not know until 28 or 29 September 2021
that the respondent had so identified a prospective purchaser, when
the respondent’s
consultant informed the applicant per
telephone that a suitable purchaser had been found and with which the
applicant must engage.
On the respondent’s own version it had
already identified this prospective purchaser on 23 September
2021 but the respondent
delayed informing the applicant of this for a
week. No reason was given for this delay.
9.
The relevance of this is that in its
attorneys’ letter of 20 September 2021 the respondent
proposed reverting by 27 September
2021. It would have been expected
that once the prospective purchaser had been identified by the
respondent on 23 September 2021
and given that it wanted to
urgently commence renovations and in the context of the
letter-writing that was already taking place
between their respective
attorneys, the respondent would have lost no time in informing the
applicant of the prospective purchaser
and seeking that the applicant
engage with that prospective purchaser. Further letter-writing would
follow, including a letter
from the respondent’s attorneys on
23 September 2021 pointing out that the further attendance of
the contractors on
site was only for preparatory work. Notably, the
respondent did not disclose in that letter that a purchaser had been
identified,
but seems to have been holding its cards close to its
chest.
10.
On 27 September 2021, the date by which the
respondent proposed reverting to the applicant’s demand of 15
September 2021,
the respondents’ attorneys in a very short
letter recorded that the respondent “
to
date, [has] been unable to conclude its internal consultations
regarding this matter
” and
therefore required still more time. The respondent repeated its
undertaking not to commence any refurbishments until
11 October
2021. By then (27 September 2021) the respondent had identified a
prospective purchaser but for some reason still
did not inform the
applicant of this development.
11.
Understandably, this uncertainty was
unacceptable to the applicant. The applicant had not yet been
informed that a prospective purchase
had been identified and it had
not been furnished with a substantive response to its demand of 15
September 2021. And the only
undertaking that had been given by the
respondent was that renovations would not commence before 11 October
2021.
12.
In light of this uncertainty, the
applicant’s attorneys addressed a letter to the respondent’s
attorney on 29 September
2021, again demanding an undertaking in
the terms of its demand of 15 September 2021 (namely that no
refurbishing would take place
until the sale process had been
concluded, alternatively pending the outcome of anticipated mediation
proceedings).
13.
On 30 September 2021, the respondent’s
attorneys addressed the following somewhat ambivalent letter to the
applicant’s
attorneys:
“
2.
We are instructed and confirm as
follows:
2.1
BPSA has conditionally identified a prospective purchaser and subject
to certain internal processes
being completed, this (and the identity
of the prospective purchaser) should be formally communicated to your
client in the near
future; and
2.2
in the interim, BPSA or its contractors will not carry out
construction or refurbishment
work at the site until the process in
2.1 above has been completed (i.e., your client has received a
formal notification referred
to above) and/or our client informs you
in writing that it intends to proceed to carry out such work.
”
14.
This response only heightened the
applicant’s uncertainty, resulting in the applicant’s
attorneys addressing a letter
to the respondent’s attorneys on
30 September 2021 furnishing the respondent a final opportunity
to provide the required
undertaking by 10h00 the next day that
renovations would not commence, failing which urgent proceedings
would be launched.
15.
The demanded undertaking was not
forthcoming and on Friday, 1 October 2021 the applicant launched
these urgent proceedings.
16.
On the same day, Friday 1 October
2021, the respondent’s attorneys addressed a letter refuting
any obligation on the
respondent’s part not to commence
refurbishment, particularly for the period contended for by the
applicant and that in the
circumstances it would defend any urgent
proceedings. The letter is lengthy and is written as a precursor of
what would ultimately
be the respondent’s case made out in its
answering affidavit. Nonetheless in this letter the respondent
recorded that it
would delay commencing with the refurbishment until
at least a first formal introduction had taken place between the
applicant
and the prospective purchaser, which would be no later than
Friday, 15 October 2021.
17.
The respondent contends that in light of
this letter the applicant should have been more circumspect in
approaching the court for
urgent relief, and at least should have
been more circumspect in requiring the urgent court to hear this
matter on Friday, 8 October
2021, being the date for which it
was enrolled, rather than on Tuesday as is the long entrenched
practice of this court, which
in this instance would be
12 October 2021. This, the respondent argues, would have
given the parties more time to attend
to the matter, including for it
to deal with any new material that surfaced in the applicant’s
replying affidavit.
18.
In my view, the applicant has made out a
sufficient basis for urgency. It was only on 10 September 2021
that the applicant
can be said to have a sufficiently reasonable
apprehension that renovations would commence imminently and so it
cannot be faulted
for not having been more proactive before then. In
my view, as demonstrated by the correspondence, the applicant cannot
be faulted
for the delays caused by it first seeking undertakings
from the respondent so as to avoid urgent proceedings. The respondent
did
ask for various indulgences to consider its position and to
respond. The applicant acceded to those requests. Having asked for
those indulgences and having been granted those indulgences, the
respondent cannot seek to fault the applicant in not having launched
these proceedings earlier. It also remains unexplained why when time
was of the essence the respondent sought indulgences, particularly
when it had already identified a prospective purchaser for the
business as early as 23 September 2021.
19.
The respondent had made it plain that it
intended commencing with its renovations, initially from 11 October
2021, and then
from 18 October 2021. The applicant accordingly
was entitled to approach court for urgent relief as otherwise that
which it
seeks to interdict would occur.
20.
I am also persuaded that the applicant has
made out a sufficient case for this matter to be heard on the Friday,
rather than the
following Tuesday. The respondent’s
delaying of the commencement of its refurbishment to 18 October 2021
came
too late to avert the urgency of the matter and the enrolment of
the matter for the Friday. Had the respondent come earlier with
its
revised date when renovations would commence, perhaps the applicant
could have been faulted for seeking that the matter be
heard on a day
other than a Tuesday. But the respondent did not.
21.
In the circumstances, I find that the
matter is sufficiently urgent to be heard on an urgent basis, that
the truncation of the usual
periods for the exchange of affidavits is
appropriate and commensurate with the degree of urgency and that the
set down of the
application for Friday, 8 October 2021 is
justified.
22.
These facts relating to my reasoning why
the matter is urgent also assists in giving some context to the
balance of this judgment.
23.
As the formulation of the relief that is
sought by the applicant is particularly important, I set out verbatim
the interdictory
relief that is sought by the applicant in its notice
of motion:
“
2.
Thw Respondent is hereby interdicted – pending the completion
of the sale of the business (with
franchises) conducted by the
Applicant on the premises known as BP Ridge Oasis, N3 North bound,
Cato Ridge, KwaZulu-Natal,
3680 (including buildings thereon)
and transfer to a purchaser approved by the Respondent, ALTERNATIVELY
pending the commencement
of the mediation process by the giving of
written notice within 30 days of this order by the Applicant to the
Respondent, and the
finalisation of such process by mediation and/or
arbitration – from:
2.1
revamping and/or refurbishing and/or altering the premises known as
the BP Ridge Oasis,
N3 North bound, Cato Ridge, KwaZulu-Natal,
3680 (including buildings thereon);
2.2
interfering, directly or indirectly through third parties, with the
use and enjoyment and
conduct in the business of the applicant on the
premises known as the BP Ridge Oasis, N3 North bound, Cato Ridge,
KwaZulu-Natal,
3680 (including buildings thereon).
”
24.
The
respondent submits that this relief is final in effect and therefore
the requirements of a final interdict need to be satisfied,
including
that the applicant has a clear right to the relief that it seeks. I
do not propose deciding this issue, which is not
an uncomplicated
exercise,
[1]
but will proceed on
a basis favourable to the applicant, namely that which it seeks is
interim interdictory relief and therefore
it need satisfy the
requirements for that relief, particularly that it has a
prima
facie
case
although open to some doubt.
25.
The respondent argues that the difficulty
experienced by the applicant in articulating that
prima
facie
right is demonstrative of why it
has no such right to found interim relief. Typically in interdict
proceedings it is not overly
difficult for an applicant to articulate
or identify its
prima facie
right.
The disputes that usually arise in relation to the
prima
facie
right is not as to its
articulation or identification but rather as to the strength or
weakness of that articulated
prima facie
right based upon on the evidence.
26.
I raised with counsel during argument
whether a court in considering whether to grant an interim interdict
can adopt the position
that having considered the affidavits, there
may be some or other
prima facie
right
available to the applicant although its precise formulation appeared
elusive. Respondent’s counsel submitted that the
court cannot
do so and that in the absence of the applicant being able to
articulate a legally cognisable right as a first step,
before
considering the prospects of that right being proven in due course,
then an interim interdict could not be granted. With
this I agree. I
did not understand applicant’s counsel for the applicant to
submit otherwise.
27.
In the well-known
Gool
v Minister of Justice
1955 (2) SA 682
(C) at 688D-E, Ogilvie Thomps
on
J in discussing the requirement of a
prima
facie
right in this context said that “
In
my view the criterion on an applicant’s own averred or
admitted facts is: should (not could) the applicant on those
facts
obtain final relief at the trial
”
.
Should the applicant not be able to demonstrate on the facts averred
by it that it should obtain final relief in due course, then
a
prima
facie
right, although open to some doubt, will not have been established.
And this presupposes that the facts averred by the applicant
give
rise to a legally cognisable right.
28.
Importantly, for these proceedings, a
consideration of the
prima facie
right
must be in conjunction with the interim interdictory relief actually
sought. It would not avail an applicant to demonstrate
a
prima
facie
right that would sustain relief
other than that which is sought. An applicant approaches court for
specific interdictory relief
and therefore must establish the
requirements for that interdictory relief, and not for some other
interim interdictory relief
that could have been sought and
potentially granted but which was not.
29.
Allied to this, an applicant cannot expect
a court to engage in a pruning process whereby the court is called
upon, under the guise
of a discretion, to prune the over-ambitious
from the relief that is sought and so grant interim relief in a
lesser form that is
sustainable on the asserted
prima
facie
right. Similarly, a court cannot
be expected to engage in a grafting exercise to graft on to the
relief actually sought that which
may be sustainable based upon the
asserted
prima facie
right,
but which was not actually sought. A court should be cautious of
casting about in the affidavits for an appropriate
prima
facie
right, although open to some
doubt, that may sustain interim interdictory relief where the parties
themselves in their affidavits
do not seek to assert that particular
right.
30.
I accept that there may be scope for a
greater degree of judicial activism in certain instances, such as
when dealing with unrepresented
parties who may be inarticulate in
the relief they formulate or who may fail to delineate their cause of
action with the precision
that a legal practitioner would, or for
example, when dealing with minor children where the court acts as an
upper guardian
.
In
these proceedings, both parties are corporate concerns in relation to
commercial dealings worth tens of millions of rands (the
proposed
purchase price for the applicant’s business exceeds
R41 million).
31.
What then is the
prima
facie
right, although open to some
doubt, that the applicant asserts in its founding affidavit as the
basis for interim interdictory relief
preventing the respondent from
renovating the leased premises pending the completion of the sale and
transfer of the applicant’s
business to a purchaser,
alternatively the finalisation of a mediation and/or arbitration
process?
32.
The founding affidavit in paragraphs 18 to
21 identifies the right as follows:
“
18.
Prima facie Right: CRGC has a prima facie right, based on contract
(as set out below), and based on the constitutional
principle of
ubuntu
that
parties in enforcement of a contract are to act in fairness, with
reasonableness, so that justice may be done between them
and for the
benefit of the community (being all the staff of CRGC) impacted by
their contractual engagement. At the very least
clause 13 as read
with clause 16 of the Standard Terms and Conditions of the Lease
Agreement require BPSA to give written notice
of alterations –
which they failed to do – and it is implied or natural, that
such would be reasonable notice which
clearly is also not present.
19.
Ubuntu
is
a sophisticated ethic on which society functions – it
undergirds our contractual relationship, or at the very least
permeates
such – so that contracting parties for their own
sake, as well as for the sake of the community impacted by their
relationship,
are build up by interactions and enforcement of rights
in a reasonable manner. CRGC has been acting in such
ubuntu
by calling upon BPSA repeatedly, and by
giving extension after extension, for the provision of such
undertaking from 15 September
2021 to present. CRGC has in fact
further shown
ubuntu
by
not pursuing its rights after BPSA’s
mala
fide
breached the Consent Agreement
reached at the pervious [sic] mediation proceedings. BPSA has however
not acted with any
ubuntu –
and
has been strong-arming CRGC with its tactics and breaches, from the
threatened alterations in March 2020, to the breach of the
Consent
Agreement in February/March 2021, to the current threatened
alterations and ignoring the calls for a reasonable undertaking
in
this respect.
20.
There is no longer the primacy of the principle of sanctity of
contracts – which BPSA attempts to use
to force itself upon
CRGC in respect of the revamp – but it is now part of the
constitutional factors to be taken into account
in the judicial
control by a court in the enforcement of contacts – as set out
by the Constitutional Court in BEADICA 231
CC v TRUSTEES, OREGON
TRUST AND OTHERS
2020 (5) SA 247
(CC) at paragraph 72 to 78 thereof.
Such contractual rights are not to be considered in isolation,
including the enforcement thereof
– and in this instance
CRGC
has clearly shown the relevant right to the interdict requested,
which would prevent the enforcement by BPSA of rights in a
manner
which is unfair, unreasonable, and unjust, and uphold the rights of
CRGC in a manner that is indeed fair, reasonable and
just to both
parties
.
21.
The test is establishing a right that may be open to some doubt, and
for this the court takes into account
the facts set out by CRGC
together with the facts set out by BPSA which CRGC is not able to
dispute (so undisputed facts by BPSA,
due to the nature of such facts
or law in the context).
”
(The emphasis is mine).
33.
During argument I invited the applicant’s
counsel to articulate the
prima facie
right. That right was articulated as
the right of the applicant as lessee to use and enjoy the premises.
This was then refined to
the right of the applicant to insist that
the respondent comply with clause 16.6 of the lease agreement,
which, was argued,
properly interpreted and applied requires of the
respondent to give prior reasonable notice before commencing
proceedings, and
which the applicant contends has not taken place.
The further submission was made that the enforcement of the lease
agreement,
and particularly those clauses that entitled the
respondent to effect refurbishments must be done in a manner that is
not unreasonable,
unfair or unjust and that the respondent’s
enforcement of its rights in these particular circumstances in and of
itself creates
a
prima facie
right
to prevent what would be the unreasonable, unfair or unjust
enforcement of that right, with reliance being placed
inter
alia
on
Beadica
231 CC and others v Trustees for the Time-Being of the Oregon Trust
and others
2020 (5) SA 247
(CC).
This articulation of the
prima facie
right is in line with what is asserted in the founding affidavit, not
adding much and understandably so as the applicant is required
to
make out its case in its founding affidavit.
34.
The
prima
facie
right asserted by the applicant,
at its most basic, is that as lessee it is entitled to the use and
enjoyment of the premises as
envisaged in terms of the lease
agreement. The applicant accordingly seeks to found its
prima
facie
right in the contractual
relationship between the parties. The applicant does not seek to
assert a
prima facie
right
on an extracontractual basis.
35.
I deal first with the applicant’s
reliance on the terms of the lease agreement which it contends
entitles it to particular
notice before renovations can be commenced.
36.
Clause 13 of the Lease Agreement, which is
headed “LESSOR’S ACCESS TO THE LEASED PREMISES)”
provides as follows:
“
13.1
The Lessor shall have the right through its employees or contractors
at any time to enter the Leased Premises for the purposes
of
inspection or for doing any work thereon which the Lessor wishes to
undertake.
13.2 The
provisions of this clause 13 apply to anything on or within the
Leased Premises, including, but not limited to, the
Storage and
Dispensing Equipment.
13.3
Without derogating from the generality or specificity of the right of
the Lessor to access the Leased Premises in terms
of this clause 13,
and without imposing any obligation upon the Lessor in the exercise
of its rights of access, the Lessor shall
endeavour to exercise its
rights of access in such manner as will cause as little interference
as possible to the Lessee’s
business, provided, however that
the provisions of clause 16.7 shall be of full application in all its
terms in respect of the
rights of access granted herein.
”
37.
Clause 16 which is headed “ALTERATIONS
TO PREMISES” has the following relevant sub-clauses:
“
16.3
The Lessor shall have the right, at its own cost, to make such
structural improvements, alterations and additions to the Leased
Premises as it deems fit. For such purpose the Lessor shall be
entitled to:
(a)
erect scaffolding, hoarding and building equipment in, at, near or in
front of the
Leased Premises in such a manner as may be reasonably
necessary for the work being performed; and
(b)
have all such rights of access to any portion of the Leased Premises
as may be reasonably
necessary for the purposes detailed in this
clause 16, and
(c)
paint, sign write and decorate the exterior of the Buildings from
time to time as
it may in its discretion deem advisable, and to its
own colours, designs and specifications, which it may in its
discretion vary
from time to time.
16.4 The Lessee
acknowledges that it could suffer inconvenience and loss of
beneficial occupation of the Leased Premises during
the period of any
structural improvements, alterations and/or additions.
16.5 The Lessee
acknowledges that it may be necessary for its business operations to
be partially or totally suspended during
the period of the structural
improvements, alterations and additions, and the Lessee hereby agrees
to such suspension as and when
required by the Lessor.
16.6
Notwithstanding the terms of clause 16.5, the Lessor shall prior to
commencing any improvements, alterations and additions
pursuant to
clause 16.3, advise the Lessee in writing of the projected completion
date thereof, and in carrying out such improvements,
alterations or
additions, shall endeavour to cause as little interference as
possible to the Lessee’s beneficial occupation
of the Leased
Premises.
16.7 The Lessee
shall in any event have no claim against the Lessor or its officers
or servants or agents for compensation,
damages or otherwise,
resulting from the said inconvenience or loss of beneficial
occupation by reason of the exercise by the Lessor
of its rights as
detailed herein. In particular, the Lessee shall not:
(a)
have any right to cancel the Lease;
(b)
be entitled to any remission of rent;
(c)
be entitled to any compensation or damages (including consequential
damages) in respect
of any loss or damage which the Lessee may suffer
as a result of the loss of business, damage to property or
improvements thereon,
arising from the lawful exercise by the Lessor
of its rights as contained in clause 16.3, provided that the Lessor
may, at its
sole discretion, elect to pay such compensation.
”
38.
The applicant argues that clause 16.6 must
be interpreted and applied in such a way to require of the respondent
as lessor to give
the applicant prior notice of its intention to
commence improvements, alterations and additions and to inform the
applicant in
writing of the projected completion date. The respondent
argues that this is not what clause 16.6 provides. Rather, the
respondent
argues, clause 16.6 requires the respondent as lessor
before commencing the improvements, alterations and additions to
inform the
applicant as lessee that it would be doing so and in
writing inform it of the projected completion date. This, the
respondent argues,
took place at the very least by no later than
receipt by the applicant of the answering affidavit in these
proceedings, which clearly
records that the projected completion date
of the renovations would be 15 December 2021. Further, the
respondent argues, the
applicant on its own version knew from 10
September 2021 that the respondent intended commencing improvements,
alterations and
additions from early October 2021, as that is what
after all triggered these urgent proceedings.
39.
The respondent further argues that this is
fortified by clause 13.1, which gives the respondent as lessor
the right “
at any time
”
to enter upon the premises, and by clause 13.2, which expressly
provides that the respondent can do anything on or within
the
premises. This, the respondent argues, undermines an argument that
some form of reasonable notice must be given in advance.
40.
In
my view, there is some merit to applicant’s argument - in form
of a
prima
facie
right
although open to some doubt - that reasonable prior notice is
required from the respondent before renovations can commence.
Although clause 16.6 does not expressly state that reasonable advance
notice must be given, there is some room in the interpretation
and
application of that clause to find that some form of reasonable prior
notice is required, particularly if the requirements
of good faith
and
ubuntu
are to inform that exercise.
[2]
41.
The difficulty though, as identified by the
respondent’s counsel during argument, what then is that
reasonable notice period.
Given the vagueness of the
prima
facie
right as expressed in the
founding affidavit, it is not entirely unsurprising that the
applicant in its founding affidavit does
not assert what that
reasonable notice period would be and so afford the respondent an
opportunity in its answering affidavit to
deal with that asserted
reasonable notice period.
42.
But the difficulty goes further than a
deficiency in the founding affidavit on this aspect. As already
discussed, there must be
a legally cognisable link between the
asserted
prima facie
right
and interdictory relief sought including the interim period for which
it is sought. The applicant does not seek interim interdictory
relief
pending the expiration of a reasonable notice period. If the
applicant’s complaint is, as it is, that the respondent
has not
given reasonable prior notice of its intention to commence
renovations, then it would have been expected that the interim
interdict would be limited to the duration of that reasonable notice
period (or until a dispute in relation thereto has been determined,
assuming that the asserted reasonable period lasts longer than the
time taken to determine the dispute in relation thereto).
43.
In the present instance, the applicant
seeks interim relief pending the completion of the sale and transfer
of is business to a
purchaser. No case is made out that this is the
same as the reasonable notice period required upon the applicant’s
interpretation
and application of clause 16.3 of the lease
agreement.
44.
Neither is a case made out that the period
taken to finalise a mediation and/or arbitration process is linked to
reasonable advance
notice under clause 16.3.
45.
To put is plainly, there is a disconnect
between the
prima facie
right
relied upon and the interim relief claimed. A failure by the
respondent to give reasonable prior notice in terms of clause
16.3 is
not legally connected to a sale and transfer of the applicant’s
business to a purchaser, at least on the case sought
to be made out
in the papers. While the applicant seeks interim interdict until a
sale and transfer of its business to a purchaser,
it has not
established a right, even on a
prima
facie
basis, that it can insist that
the respondent hold off in its renovations until then. As most for
the applicant, it can require
of the respondent to hold off on
renovations until reasonable notice has been given, but that is not
the interdictory relief sought.
46.
The applicant also relies on what it
contends is a
prima facie
right that the respondent’s contractual right to undertake
renovations to the leased premises be enforced is a manner which
is
not unreasonable, unfair or unjust. I have had regard to the cases
referred to by the parties’ counsel, including
Beadica
231 CC and Others v Trustees, Oregon Trust and Others
2020 (5) SA 247
(CC) and
Capitec
above, and have considered the parties’ submissions, including
the heads of argument by the respondent’s counsel.
47.
Theron J for the majority in
Beadica
at paragraph 79 writes “
[t]h
ere
is agreement between this court and the Supreme Court of Appeal that
abstract values do not provide a free-standing basis upon
which a
court may interfere in contractual relationships”
and continues in paragraph 80 that:
“
[80]
It emerges clearly from the discussion above that the divergence
between the jurisprudence of this court and that of the Supreme
Court
of Appeal is more perceived than real. Our law has always, to a
greater or lesser extent, recognised the role of equity (encompassing
the notions of good faith, fairness and reasonableness) as a factor
in assessing the terms and the enforcement of contracts. Indeed,
it
is clear that these values play a profound role in our law of
contract under our new constitutional dispensation. However, a
court
may not refuse to enforce contractual terms on the basis that the
enforcement would, in its subjective view, be unfair, unreasonable
or
unduly harsh. These abstract values have not been accorded
autonomous, self-standing status as contractual requirements. Their
application is mediated through the rules of contract law including
the rule that a court may not enforce contractual terms where
the
term or its enforcement would be contrary to public policy. It is
only where a contractual term, or its enforcement, is so
unfair,
unreasonable or unjust that it is contrary to public policy that a
court may refuse to enforce it”.
48.
In
my view, the applicant’s asserted
prima
facie
right relies on the abstract values of fairness, reasonableness,
justness and
ubuntu
being
applied on a free-standing basis. This is impermissible. The
respondent’s enforcement of its expressly agreed contractual
right to effect renovations is not challenged advanced in the
founding affidavit as being contrary to public policy. No
constitutional
right is implicated as having been infringed. No
mention is made of any doctrine of common law that needs to be
developed by the
court in performing a creative, informative and
controlling function so as to afford the applicant a
prima
facie
right.
[3]
49.
In
its naked form, the applicant’s
prima
facie
right that it asserts is that the respondent is required to effect
renovations fairly, reasonably and justly, but as is clear from
Beadica
there
is no general and self-standing obligation on a contracting party to
act fairly, reasonably and justly. To repeat,
“
[i]
t
is only where a contractual term, or its enforcement, is so unfair,
unreasonable or unjust that it is contrary to public policy
that a
court may refuse to enforce it”
.
[4]
50.
There
is also, again, a disconnect between the asserted
prima
facie
right and the relief sought by the applicant. The applicant does not
assert what it contends would be a reasonable, fair and just
enforcement by the respondent of its contractual right to effect
renovations to the premises, and seek to frame its interdictory
relief with reference to that. While it may be that the respondent
insisting that the renovations take place now, as expressly
permitted
in terms of the lease agreement, rather than after the sale and
transfer of the applicant’s business to a purchaser,
as the
applicant wants, would be harsh on the applicant and at least some of
its employees, “
a
court may not refuse to enforce contractual terms on the basis that
the enforcement would, in its subjective view, be unfair,
unreasonable or unduly harsh”
.
[5]
51.
The present lease is on a month-to-month
basis. The interim relief that is sought by the applicant, if
granted, fails, in my view,
to take cognisance that the respondent is
entitled to give notice terminating the lease. If the lease is
terminated, then no basis
is made out why the applicant can remain in
occupation and therefore continue to insist that no renovations take
place for a period
extending beyond the notice period. I put to the
applicant’s counsel whether termination of the lease agreement
on notice
would bring an end to the interim interdict if it has
already been granted, to which the response was that it would not
because
the interdict if granted is pending the completion of the
sale and transfer of the business to a purchaser and if that had not
yet taken place, the interdict would remain in place. The interim
interdict if granted in effect gives the applicant security of
tenure
without any basis made out for why the applicant would be entitled to
remain in occupation of the premises beyond the lawful
termination of
the lease agreement in notice. This again illustrates the disconnect
between the interdictory relief that is sought,
particularly the
temporal nature thereof, and the underlying
prima
facie
right which is asserted as a
basis for that relief.
52.
The lease agreement does provide for
mediation:
“
38.1
The Parties agree to attempt to resolve any dispute, question or
difference arising at any time between the Parties to this
Lease in
regard to the matter arising out of, or the rights and duties of any
of the Parties hereto, or the interpretation or termination
of, or
any matter arising out of the termination or the rectification of
this Lease by mediation, which, failing agreement between
them on the
procedure and the identity of the mediator, shall be conducted under
the then current mediation procedure of the Arbitration
Foundation of
South Africa (“AFSA”), and by a mediator nominated
by AFSA.
38.2 The parties
undertake to participate in good faith participation in mediation
before pursuing any other available legal
or equitable remedy,
including litigation, arbitration or other dispute resolution
procedure.
38.3
Either Party (“the initiating Party”) may commence the
mediation process by giving written notice to the
other, setting out
the subject matter of the dispute, question or difference or the
relief requested. Within ten (10) days after
the receipt of such
notice, the other Party shall deliver a written response to the
initiating Party’s notice. The initial
mediation session shall
be held within thirty (30) days after the initial notice.
”
53.
The applicant does not seek to rely upon
this clause as a self-standing basis giving rise to a
prima
facie
right why interim interdictory
relief should be granted. No mention of mediation is made in its
description of its
prima facie
right in its founding affidavit. The applicant’s reference to
mediation is for purposes of advancing an alternate period
for which
the interim relief is to remain in place rather than as a
self-standing basis giving rise to a
prima
facie
right.
54.
That
an interim interdict linked to the finalisation of a mediation
process may be short-lived
[6]
and would therefore not suit the applicant’s commercial
imperatives to remain in occupation of the premises until its
business
is transferred to a purchaser, which may take up to a year,
may have informed the applicant in the framing of its relief,
particularly
for how long that interim relief is to remain in place.
Also telling, in my view, is that the applicant has not actually
initiated
a mediation process, although it is within its power to do
so, but instead requires interim interdictory relief pending the
finalisation
of a mediation process that it must still initiate by
giving written notice within thirty days of an order. Clause 38.3
requires
no more of the applicant than to give notice to the
respondent setting out the subject matter of the dispute, question or
difference
or the relief requested. Although the applicant asserts in
its founding affidavit that formulating the disputes is “
a
very involved process”
,
which has been complicated by a change of attorneys and counsel, this
is unpersuasive. It appears simple enough for the applicant
to have
furnished notice to the respondent stating that the dispute, question
or difference to be mediated was the respondent’s
insistence to
commence with renovations now whereas the applicant did not want that
to happen. Unlike the precision that may be
required when formulating
a particular right or cause of action that is the subject of
litigation, whether by way of court or arbitration
proceedings, a
referral of a dispute, question or difference to mediation does not
require such precision.
55.
Even should the applicant’s
affidavits be read generously as asserting the mediation process in
clause 38 of the lease
agreement as giving rise in and of itself
to a
prima facie
right,
in my discretion I am disinclined to grant an interim interdict in
circumstances where the applicant has delayed in initiating
the
mediation proceedings that underlie that asserted
prima
facie
right.
56.
The overall impression created from
considering the disconnect between the interdictory relief sought by
the applicant, particularly
its temporal nature, and the
prima
facie
rights asserted in the
applicant’s affidavits is that the applicant seeks an interim
interdict of a significantly longer duration
than is justified by the
prima facie
rights
it asserts, assuming that it can establish those
prima
facie
rights. The applicant seeks as
its primary relief interdictory relief pending the completion of the
sale process as this would
suit its commercial imperatives of
remaining in the leased premises without the interference of
renovations until transfer of the
business to the new purchaser. But,
as already found, the applicant has not established a
prima facie
right that it is entitled to remain in the premises until transfer of
the business to the new purchaser. Although interim relief
pending
the outcome of a mediation process would be of a shorter duration,
again the applicant in the formulation of its relief
has chosen to
seek of the court to grant interdictory relief of a considerably
longer nature. The applicant does not only seek,
when framing the
period that the alternative interim interdictory relief is to remain
in place, that it remain in place pending
the finalisation of the
mediation process but also the finalisation of the arbitration
process. The applicant argues that this
is appropriate because of
what it contends is the respondent’s failure to abide the
outcome of the previous mediation process,
and as the respondent may
do so again, so the applicant argues, it is appropriate that the
interim interdict remains in place pending
the outcome of arbitration
proceedings following upon the mediation proceedings. The applicant
has not identified the
prima facie
right
that is linked to and would justify interim relief of that duration,
or in the formulation of the relief what the dispute
is that is
required to be resolved by arbitration.
57.
Perhaps realising these difficulties, I was
invited in replying argument for the applicant, through the exercise
of discretion,
to curtail or otherwise effectively adapt the interim
relief that is being sought in the notice of motion. For example, I
was invited
to potentially limit the relief to only restraining
renovations in respect of the convenient store as it was those
renovations
that once effected would be particularly prejudicial to
the respondent. This is because the convenient store, once renovated,
would
be converted to a Pick n Pay convenience store and that because
the applicant was not a Pick n Pay franchisee, it would
not
be able to make use of that convenient store and so would lose the
use of that part of leased premises permanently. The applicant
argues
that this is not what was envisaged in the lease agreement, i.e. it
was not envisaged that the respondent could permissibly
effect
renovations that would effectively prevent the applicant from
enjoying the use of the premises once completed. There is
merit to
this. The difficulty is that it is not interdict that was sought of
the court in the notice of motion and was not the
interdictory relief
that the respondent was called upon to oppose. As the respondent’s
counsel submitted, the respondent’s
position, and the evidence
adduced by it in the answering affidavit, may have been different if
confronted with this curtailed
form of relief,
58.
The court was also invited during argument
in reply to remove the interim interdict being linked to the outcome
of the arbitration
process and be limited only to the finalisation of
the mediation process, and so ease any concern that the interdictory
relief
if granted would be too long. Again, this is not the interdict
that was sought by the applicant, and which the respondent was called
upon to oppose. A more circumspect framing of interim relief linked
to the outcome of an already initiated mediation process in
terms of
clause 38 of the lease agreement may have elicited a different
response or approach from the respondent.
59.
To conclude on this issue, the applicant’s
demand of 15 September 2021 in paragraph 7, sums up the situation in
the applicant’s
own words:
“
As
BPSA is presently completing the sale of the (i) garage,
petrol-filling and service station; convenience store; Wild Bean
Café;
automatic teller machine facility; and quick service
restaurant (“the garage premises”) together with the (ii)
QSR
business, comprising Steers and Debonairs franchises, which is
owned by Sanroy Trading (Pty) ltd (“the QSR business”),
it is not beyond expectation that
the revamp / refurbishment be delayed until such time the sale is
completed and our Client has
transferred ownership and possession to
the new owner
”.
(my emphasis).
60.
Although founding and replying affidavits
were delivered, the applicant did not ultimately get much further
than what it has recorded
at the outset on 15 September 2021, namely
that it had an expectation – and nothing much more – that
the renovations
be delayed until it had sold and transferred its
business to a purchaser.
61.
To
return to the test from Ogilvie Thomps
on
J in
Gool
v Minister of Justice
[7]
-
should
(not could) the applicant on its own averred facts or the admitted
facts obtain final relief in due course
-
I
find that the applicant should not.
62.
I am therefore unpersuaded that the
applicant has established a
prima facie
right, although open to some doubt,
that would found the interim relief that it seeks
63.
In the circumstances, it is unnecessary to
deal in any detail with the remaining requirements of an interim
interdict. I mention
that the harm of which the applicant complains,
other than potentially in relation to its inability to make use of
the convenient
store once it is converted to a Pick n Pay
outlet, is harm which the parties envisaged and expressly regulated
for in
clauses 16.4, 16.5 and 16.7 of the lease agreement on the
basis that the applicant accepts that it may suffer such harm and for
which it accepts that it can have no claim against the respondent.
Having expressly taken upon itself the risk of that harm, there
is
considerably less scope for the applicant to contend that such harm
is legally cognisable for purposes of demonstrating the
remaining
requirements of an interim interdict. The applicant is on stronger
grounds when it comes to the harm that results from
the convenient
store being converted through the renovations to a Pick n Pay
outlet that it cannot use as it is not a Pick
n Pay franchise, but,
again, that is not the interim relief which the applicant seeks of
the court, other than by way of a belated
invitation during replying
argument to potentially limit the interim relief to restraining
renovations to the convenient store.
64.
The focus of the argument as well as this
judgment has been on the interdictory relief sought by the applicant
in prayer 2.1 of
its notice of motion preventing the respondent from
effecting renovations to the premises. The applicant does seek
further interdictory
relief in prayer 2.2 of its notice of motion
interdicting the respondent from interfering, directly or indirectly
through third
parties, with its use and enjoyment and conducting of
its business on the leased premises. This appears to be little other
than
an adjunct to the balance of the relief. The facts set out in
the applicant’s affidavits to justify this relief is sparse
and
goes little further than the presence of a security guard having been
placed upon the premises at the instance of the respondent.
In my
view, insufficient averments are made out in an affidavit to sustain
this relief, which in any event suffers from the same
disconnect when
it comes to the duration of the interdictory relief sought.
65.
There is no reason why costs should not
follow the result and why they should not be on the ordinary scale.
66.
The following order is made:
66.1.
The application is dismissed.
66.2.
The applicant is to pay the costs.
Gilbert
AJ
Date
of hearing:
8 October 2021
Date
of judgment:
12 October 2021
Counsel
for the applicant:
Mr Meijers
Instructed
by:
Alhadeff Attorneys
Counsel
for the respondent:
Ms I Goodman
Instructed
by:
Nortons Inc.
[1]
See
the discussion in
Andalusite
Resources (Pty) Ltd v Investec Bank Ltd and Another
2020 (1) SA 140
(GJ), particularly para 21 to 24.
[2]
Capitec
Bank Holdings Limited and Another v Coral Lagoon Investments 194
(Pty) Ltd and Others
(470/2020)
[2021] ZASCA 99
(09 July 2021), para 67.
[3]
Beadica,
majority
judgment at para 73.
[4]
Beadica
,
majority judgment at para 80.
[5]
Beadica
,
majority, para 80.
[6]
Clause
38 stipulates periods for the conduct of the mediation process.
[7]
Above,
at 688D-E.