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[2021] ZAMPMBHC 49
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Pine Glow Investments (Pty) Ltd v Minister of Energy and Others (3525/2020) [2021] ZAMPMBHC 49 (22 October 2021)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
(MPUMALANGA DIVISION,
MBOMBELA)
CASE
NO: 3525/2020
REPORTABLE: NO
OF INTEREST TO OTHER
JUDGES: YES
REVISED: YES
22/10/2021
In
the matter between:
PINE
GLOW INVESTMENTS (PTY)
LTD
Applicant
and
THE
MINISTER OF
ENERGY
First Respondent
THE
CONTROLLER OF PETROLEUM PRODUCTS
Second Respondent
ERF
6 HIGHVELD TECHNOPARK INVESTMENTS
(PTY)
LTD
Third Respondent
NAD
PROPERTY INCOME FUND (PTY) LTD
Fourth Respondent
ROYALE
ENERGY (PTY)
LTD
Fifth Respondent
ROYALE
ENERGY GROUP (PTY) LTD
Sixth Respondent
ROYALE
ENERGY MANAGEMENT SERVICE (PTY) LTD
Seventh Respondent
ROYALE
ENERGY OLIFANTSFONTEIN (PTY) LTD
Eighth Respondent
VIVA
OIL (PTY)
LTD
Ninth Respondent
TOKIVACT
(PTY)
LTD
Tenth Respondent
JUDGMENT
MASHILE
J:
INTRODUCTION
[1]
Unless context suggests otherwise, Respondents in this judgment means
the Third and
Fourth Respondents. This matter first served before
this Court as an urgent review application in terms of Uniform Rule
of Court
6(12) (b) consisting of Parts A and B. The former, on
interim basis, sought to interdict the Respondents from proceeding
with the
building of a filling station in the area of Acornhoek,
Mpumalanga. The application was meant to be heard on 19 January 2021
but
the parties arranged that the Respondents would temporarily cease
construction of the filling station for approximately two weeks.
On
that understanding, the application was postponed to 2 February 2021.
[2]
Again and as per the parties’ agreement, the application for
the interim relief
as described
supra
came before this Court
on 2 February 2021. Following argument on urgency, the Court
considered the application and struck it off
the roll of that day on
the ground that there was no justification for urgency. Subsequently,
the parties resolved to set the matter
down for 3 May 2021 for the
hearing of Part B. On that day, the Respondents raised
locus
standi as
a preliminary point, which they stated only dawned upon
them during the course of the previous day, 2 May 2021.
[3]
The questions that had to be decided on that day became firstly,
whether or not the
Respondents were entitled to raise
locus standi
at that late juncture of the proceedings especially bearing in mind
that Part A had already been decided without such having been
advanced as a grave controversy. Secondly, whether or not the Court
should uphold the issue of
locus standi
as a preliminary point
and dismiss the application without deciding the merits. On the first
aspect, I ruled in favour of hearing
the point
in limine.
In
doing so, the Court was guided by the decision in the matter of
Tulip
Diamonds FZE v Minister of Justice & Constitutional Development &
Others
2013 (10) BCLR 1180
(CC)
where the Court stated at Paragraph 25:
“
I
do not agree with Tulip’s approach. Courts have stated that it
would create an intolerable situation if a Court were to
be precluded
from giving the right decision on accepted facts merely because a
party failed to raise a legal point as a result
of an error of law on
its part. It would be intolerable if this Court were to be bound by
an error of law made by a party which
that party then, within
reasonable time, corrected. There must be exceptionally good reason
for a court’s assessment of law
to be fettered by a party’s
error.”
[4]
Although it was manifest that
locus standi
was raised very
late in the proceedings, the Court decided that the late introduction
of the point on its own could not constitute
extraordinary reason
contemplated in the Tulip case
supra
to bar the Respondents
from introducing it as a preliminary issue. Having allowed the
Respondents to introduce the issue as a
point in limine
, the
case was argued and judgment was reserved. The parties were directed
to obtain another date on which the merits would, depending
on the
outcome on
locus standi
, be argued. I was later advised that
the request of the Court that the matter be heard as a special motion
had been heeded and
that the parties have been allocated the 25
th
to 27
th
of October 2021 as dates on which the application
would be heard. As such, this judgment is on whether or not the
Applicant has
established that it has
locus standi
LOCUS STANDI
[5]
The Respondents have fervently contended that the Applicant, as a
wholesaler of petroleum
products, has failed to establish that it has
locus standi
in that it will not be ‘adversely and
materially affected’ by the decision of the Second Respondent
awarding the license
to the Respondents. Instead, the Applicant,
argues the Respondents, has sought to show how the approval of
another license would
negatively or prejudicially affect operators of
filling stations in the area. The lack of demonstration of prejudice
to the Applicant
in the founding papers means that it has simply
failed to allege and prove
locus standi
. As such, conclude the
Respondents, this failure is fatal and the application as a whole
ought to be dismissed.
[6]
Conversely, the Applicant contends that from inception
locus
standi
was never an issue in these proceedings. Part A was argued
and finalized without the issue surfacing. It would be unconscionable
if this Court were to entertain the point at this late juncture of
the proceedings. In any event, the Respondents did not or seriously
contest the allegations of the Applicant made in that regard. To the
extent necessary, maintained the Applicant, the
locus standi
allegations made in the founding papers are sufficient.
LEGAL FRAMEWORK
[7]
It is a suitable moment to turn to case law to seek guidance on the
issue. I note
that both parties have referred this Court to the
matter of
Giant Concerts CC v Ronaldo Investments (Pty) Ltd &
Others,
2013 (3) BCLR 251
(CC)
where the Court held at
Paragraph [41] that:
“
These
cases make it plain that Constitutional own-interest standing is
broader than the traditional common law standing, but that
a litigant
must nevertheless show that his or her rights or interests are
directly affected by the challenged law or conduct. The
authorities
show:
(a)
To establish own-interest standing under the Constitution a
litigant need not show the same ‘sufficient, personal and
direct
interest’ that the common law requires, but must still
show that a contested law or decision directly affects his or her
rights or interests, or potential rights or interests.
(b)
This requirement must be generously and broadly interpreted to
accord with constitutional goals.
(c)
The interest must, however, be real and not hypothetical or
academic.
(d)
Even under the requirements for common law standing, the
interest need not be capable of monetary valuation, but in a
challenge
to legislation purely financial self-interest may not be
enough – the interest of justice must also favour affording
standing.
(e)
Standing is not a technical or strictly-defined concept. And
there is no magical formula for conferring it. It is a tool a Court
employs to determine whether a litigant is entitled to claim its
time, and to put the opposing litigant to trouble.
(f)
Each case depends on its own facts. There can be no general
rule covering all cases. In each case, an Applicant must show that he
or she has the necessary interest in an infringement or a threatened
infringement. And there a measure of pragmatism is needed.”
[8]
The Controller is appointed by the Minister in terms of Section 3 of
the Petroleum
Products Act, 120 of 1977 (“the PPA”).
Subsections 1 to 3 of the PPA respectively provide:
“
3.
Appointment
and
powers
of
controllers
and
inspectors.
—
(1)
The Minister—
(a)
shall, subject to the laws governing the public service, appoint any
person in the
public service as Controller of Petroleum Products and
may appoint persons in the public service as regional controllers of
petroleum
products or as inspectors for the Republic or any part
thereof;
(b)
may on such conditions and at such remuneration as he or she may in
consultation with
the Minister of
Finance
determine,
appoint
or
authorised
any
other
person
or
person
belonging
to
any
other category
of
persons
to act
as
regional
controller
of
petroleum products
or
as
inspector
for
the Republic or any part thereof.
(2)
Subject
to
the
provisions
of
this
Act,
the
Controller
of
Petroleum
Products,
a
regional
controller
of petroleum products and an
inspector—
(a)
may assist the Minister in the exercise of his powers and the
performance of his functions
under this Act;
(b)
may gather such information in connection with the operation or
administration of
this Act as the Minister may desire, and
investigate any offence relating to this Act.
(3)
The Minister shall, subject to the provisions of this Act, determine
the powers, duties
and functions of the Controller
of
Petroleum
Products,
a
regional
controller
of
petroleum
products
and
an
inspector,
and
different powers,
duties and
functions
may
thus
be
determined
in
respect
of
different
persons
or categories
of
persons appointed or authorized
under subsection (1).”
[9]
The Minister can thus assign duties to a Controller or a Regional
Controller anywhere
in the Republic of South Africa. The Jurisdiction
of a Controller or Regional Controller is as such, determined by the
Minister.
The powers that the Controller exercises can also be wide
or circumscribed by the Minister. The Controller’s approval of
the license to the Respondents indubitably constitutes an act by an
administrative body. It is therefore an administrative action
as
defined in Section 1 of the Promotion of administrative Justice Act,
3 of 2000, which provides that:
“
'administrative
action'
means any decision
taken, or any failure to take a decision, by-
(a)
an organ of state, when-
(i)
exercising a power in terms of
the Constitution or a provincial constitution; or
(ii)
exercising a public power or
performing a public function in terms of any legislation; or
(b)
a natural or juristic person, other
than an organ of state, when exercising a public power or performing
a public function in terms
of an empowering provision, which
adversely affects the rights of any person and which has a direct,
external legal effect, but
does not include-
(aa)
the executive powers or functions of the
National Executive,
including the powers or functions
referred to in sections 79 (1) and (4), 84 (2) (a), (b), (c), (d),
(f), (g), (h), (I) and (k),
85(2)
(b)
,
(c), (d) and (e), 91 (2), (3), (4) and (5), 92 (3), 93,97, 98,
99
and 100 of the Constitution;”
[10]
It is common cause that a party must allege and demonstrate that it
has
locus standi.
In the context of PAJA, that its interests
have been affected by the unlawful action of the administrative
action. The Applicant
ought therefore to establish that it has been
‘materially and adversely affected’ by the administrative
action of the
Controller by approving the license. In Tulip the Court
stated:
“
that
its interests or potential interests are directly affected by the
alleged unlawfulness of the actions taken by the respondents.
To
succeed, Tulip must establish both components of own-interest
standing: interest and directly effect. As discussed in Giant
Concerts, Tulip must demonstrate that its interests are more than
hypothetical or academic. It must also show that its interest
and the
direct effect are not unsubstantiated. Mere allegations, without
more, are not sufficient to prove the elements of own-interest
standing.”
ANALYSIS
[11]
It is evident that both parties ascribe a great measure of
significance to the case of Giant
Concerts CC
supra
but derive
from it two divergent outcomes. The upshot of the Giant Concerts CC
case is that there cannot be a rigid rule and that
each case must be
assessed with reference to its peculiar circumstances having regard
to the parameters laid down in the case.
It is settled that
Constitutional own-interest standing is broader than the traditional
common law standing. That said, a party
ought to nonetheless
establish that its rights are directly affected by the impugned law
or conduct. This requirement must be demonstrated
with due regard to
the 5 limitations set out in the Giant Concerts CC case
supra.
[12]
The requirement above must be liberally and broadly interpreted to
accord with constitutional
goals. The Applicant has asserted in this
regard that an additional license in an environment where there are
existing filling
stations able to sustain the current population and
its business activities, approval of additional site and retail
licenses without
concomitant growth in the economy of the area might
serve no more than to dislodge one of the operators manifestly
eliciting the
question whether or not it is necessary at all. In
fulfilling its constitutional imperatives, the PPA provides in
Section 2B that:
“
2B.
Licensing. — (1)
The
Controller
of
Petroleum
Products
must
issue
licenses
in
accordance
with
the provisions of this Act.
(2)
In considering the issuing of any
licenses in terms of this Act, the Controller of Petroleum Products
shall give effect to the provisions
of section 2C and the following
objectives:
(a)
Promoting an efficient manufacturing, wholesaling and retailing
petroleum industry;
(b)
facilitating an environment conducive to efficient and commercially
justifiable investment;
(c)
the creation of employment opportunities and the development of small
businesses in
the petroleum sector;
(d)
ensuring countrywide availability of petroleum products at
competitive prices;
and
(e)
promoting access to affordable petroleum products by low-income
consumers for household
use.”
[13]
Section 2b is meant to promote the transformative agenda contained in
Section 2C, which provides
that:
“
2C.Transformation
of South African petroleum and liquid fuels industry. —
(1)
In
considering
license applications in terms of this Act, the Controller of
Petroleum Products shall—
(a)
promote the advancement of historically disadvantaged South Africans;
and
(b)
give effect to the Charter.
(2)
The Controller of Petroleum Products may require any category of
license holder to
furnish information, as prescribed, in respect of
the implementation of the Charter.”
[14]
While the addition of another license may not necessarily have the
effect of destroying the transformative
agenda, it will certainly not
create a harmonious relationship between the different operators.
This may result in an unintended
chaos – one filling station
developing while another folds, fails and disappears. This is
certainly not adding to the development
of the economy of the area as
intended in the PPA for the number of filling stations might remain
the same. As such, the introduction
of another filling station may
not add any value and might not assist to achieve the constitutional
goals referred to in the Giant
Concerts CC case
supra.
[15]
At paragraph 7 of its founding affidavit the Applicant alleges that
it is the site license holder
for the Caltex Acornhoek Mall filling
station. The physical license, however, refers to Caltex Acornhoek
Plaza. I have reflected
on this and accept that reference to Mall
instead of Plaza was inadvertent. At paragraphs 65 and 66 of the same
affidavit it states
as follows:
“
65.
The revenues the applicant, as a licenced wholesaler,
and proprietors of filling stations stand to lose as explained above
are significant
and irrecoverable if the respondents’ licences
were to be set aside on review after the proposed filling station
commenced
operations.
66.
While it is difficult to quantify precisely what those losses will
be, the respondents’
own applications suggest that they expect
to attain sales volumes of approximately 350 000 litres per month.
This would represent
a collective financial loss to the existing
filling stations in the order of R775 600, 00 (Seven hundred and
seventy- five
thousand six hundred Rand) per month (350 000 litres x
the regulated retail margin of R 2.216 per litre). This collective
financial
loss will result in the existing and to-be-affected filling
stations in the vicinity falling below the efficiency objective of
the PPA.”
[16]
The fact that the Applicant is a site license holder for Caltex
Acornhoek Mall filling station
on its own gives it a direct interest
in the matter. The tenth Respondent firstly, is a business tenant of
the Applicant because
it operates a filling station on land belonging
to the Applicant. Secondly, it stands to reason that the Applicant
derives income
in the form of rentals by being the holder of the site
license. Should there be a decline in the number or volume of
petroleum
products sold to the Tenth Respondent, the knock on effect
on the Applicant as a holder of a wholesale license will be
inexorable.
As such, its interest is not only direct but also real
and not suppositious in the manner contemplated in the Giant Concerts
CC
case
supra
.
[17]
At paragraph 66 of the founding affidavit, the Applicant specifically
alleges that ‘as
a wholesale license holder and as a proprietor
of filling stations’ it stands to lose on revenue when the
Respondents commence
with operation of the filling station. It could
well be that the Applicant does not specify the margins of its
expected loss but
the Respondents themselves make the point that they
anticipate to attain sale volumes of approximately 350 Litres per
month.
[18]
The 350 Litres that the Respondents expect to pump monthly
essentially means that the existing
filling stations, including the
Applicant as a wholesale supplier of petroleum products, will absorb
the decline in volumes especially
in circumstances where the
introduction is not supported by increase in the size of the
population and business activity.
[19]
The Respondents denial that the Applicant will be materially and
adversely affected when their
new filling station commences
operations is staggering. The expected loss of income is material and
it will affect the Applicant
negatively insofar as it will diminish
its financial margins. Over and above the financial interest it
cannot be in the interest
of justice to deny the Applicant of
locus
standi
where the granting of another license may not enhance the
constitutional goals set in the PPA – to ensure the observance
of
the transformative agenda as contained in Section 2C of the PPA.
The satisfaction of the transformative agenda does not entail
substituting one previously disadvantaged individual by another.
CONCLUSION
[20]
Against that background, the administrative action of the controller
and/or the Minister has
materially and adversely affected the
Applicant as envisaged in the Tulip case
supra
. In the
circumstances, the Applicant has successfully demonstrated that it
has
locus standi
it being immaterial that there is no specific
rubric under which it traverses the subject. The Respondents’
point
in limine
concerning
locus standi
fails
and I make the following order:
1.
The point in limine is dismissed;
2.
The Applicant’s
locus standi
is confirmed; and
3.
The Respondents are to pay the costs of the Applicant.
B A MASHILE
JUDGE OF THE HIGH
COURT OF SOUTH AFRICA
MPUMALANGA DIVISION,
MBOMBELA
This judgment was
handed down electronically by circulation to the parties and/or
parties’ representatives by email. The date
and time for
hand-down is deemed to be 22 October 2021 at 10:00.
APPEARANCES:
Counsel for the
Applicant:
Adv MC Erasmus SC
Instructed
by:
WDT Attorneys
Counsel for the 3
rd
and 4
th
Respondents:
Adv A Venter
Instructed
by:
A. Kock & Associates Inc
Date of Judgment:
22 October 2021