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[2019] ZAGPPHC 514
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Streaks Ahead Investments (Pty) Limited and Others v Lepelle Industrial and Mining Supplies CC and Others (A243/17) [2019] ZAGPPHC 514 (27 March 2019)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
(1)
REPORTABLE:
YES/NO
(2)
OF
INTEREST TO OTHER JUDGES:
YES
/NO
CASE NO: A243/17
27/3/2019
In the matter between;
STREAKS AHEAD INVESTMENTS (PTY)
LIMITED
First Appellant
SOROKA FILLING DTATION
CC
Second Appellant
ERF 344 ONlWIKKELING (PTY)
LINIITED
Third
Appellant
and
LEPELLE
INDUSTRIAL AND MINING SUPPLIES CC
First Respondent
MINISTER OF ENERGY NATIONAL
GOVERNMENT
Second Respondent
CONTROLLER OF PETROLEUM
PRODUCTS
Third Respondent
BA-PHALABORWA
LOCAL AUTHORITY
Fourth Respondent
MEC,
DEPARTMENT OF ECONOMIC DEVELOPMENT,
F;NVIRONMENT
& TOURISM, LIMPOPO PROVINCE
Fifth Respondent
MEC
FOR LOCAL GOVERNMENT AND HOUSING
LIMPOPO
GOVERNMENT
Sixth Respondent
REGISTRAR OF
DEEDS
Seventh Respondent
JUDGMENT
By
the Court;
1
This
is an appeal against two decisions of Baqwa J, in separate but
related applications, both under case no. 76409/17. The appeals
are
brought with the leave of the learned judge below.
2
The
whole case arises because the preset1tfiritrespondent (Lepelle) and
the present second appellant (Soroka) operate filling stations
in
Namakgale district in Phalaborwa, where they compete for the custom
of the public. They are both retailers of petroleum products,
such as
petrol, diesel and engine oil.
3
The
first decision arose from an application for an interim interdict.
Lepelle won the interdict application. An order was made
interdicting
Soroka from carrying on its retail business. In the second decision,
Boroka was found guilty of contempt of court
in contravening the
order made in the interdict application.
4
In
Part A of the notice of motion for interdict relief, dated 15 October
2014, brought by Lepelle as applicant against the appellants
(Streaks, Soroka and Erf 344 respectively) and all the other parties
who feature as respondents in this appeal, Lepelle sought
wide
ranging relief. The relief sought was expressed to operate pending
various other proceedings, ie appeals against the decision
of the
fourth respondent (the Controller) to grant Streaks a site license
and to grant Boroka a retail license, a judicial review
(at that
stage not yet instituted) and final relief under a separate Part B of
the notice of motion.
5
The
notice of motion sought, in relation to erf 3465 in township
Namakgale B (the property), an interdict against any construction
or
trading activities or retail activities or selling of petroleum
products or conducting of business of any nature.
6
The
statute whose interpretation lies at the heart of the present appeal
is the Petroleum Products Act.
[1]
Broadly speaking, the policy of the measure is that in order for a
filling station such as those conducted by the competing parties
to
be operated lawfully, two licenses must be in place. The first is a
site license which empowers the holder to hold and develop
a site on
which retail sales of petroleum products may take place. The second
is a retail license, which empowers the actual retail
sales of such
products, mostly to the motoring public. Much more about these
licenses and the legal consequences of their policy
interconnectedness will follow.
7
As
in the court below, only Lepelle, Streaks, Boroka and Erf 344 were
represented and presented argument before us. The other respondents
either abided or did not oppose.
8
To understand the background to the
interdict application, we must begin in 2006. Streaks, acting through
town planners and other
professionals was interested in developing
the property. Streaks wanted to put up a shopping complex and engaged
the authorities
for this purpose. The authorities agreed. Streaks
bought andin2008 took transfer of the property. In 2008, Streaks
applied for
permission to put up the shopping complex and, on a
proposed subdivided portion of erf 3465, a service station. In the
same year,
the provincial authorities approved the use of the
property as a shopping complex.
9
By
2010, negotiations between Streaks and Total South Africa towards a
service station lease on a portion of the property had reached
an
advanced stage.
10
In
2012, Streaks both sold the property to Erf 344 and leased it to
Soroka. The lease makes clear that Soroka intended to operate
a
filling station on the property. In 2013, Streaks transferred the
property to Erf 344, which then developed the property and
leased out
portions of the property to various traders..
11
Parallel
to these transactions, on 26 November 2012, Streaks applied for what
the PPA calls a site license and Boroka applied for
a retail license.
On 7 April 2013 Lepelle and at least one other objected to the grant
of these two licenses. Despite the objections,
the site and retail
licenses were granted on 16 July 2013.
12
On
15 August 2013, Lepelle became aware that the licenses had been
granted. It began accumulating documents and information with
a view
to mounting legal challenges to the legitimacy of the licenses.
Lepelle first made use of administrative remedies by lodging
internal
appeals to the second respondent (the Minister). Its first internal
appeal was lodged on 17 October 2013. These appeals
failed, from
Lepelle's perspective, to bear fruit. Lepelle then instituted the
interdict application in the court below.
13
By
this stage, both the shopping complex and Boroka's filling station
were up and running. The shopping complex on the property
opened for
business in September 2013. Soroka began selling petroleum products
on the property on about 22 May 2014.
14
Lepelle's founding affidavit included
over 50 pages of factual allegations. Because of the way the case
developed, we need not analyse
these allegations in any detail.
Lepelle itself however summarises the case it (initially) sought to
present as follows:
[2]
[Lepelle] is not the current owner
of the property and cannot be the site license holder;
[T]he filling station was
constructed without the necessary valid environment I authorisation
or lite licence;
[T]he environmental authorisation
was applied for and approved on property that does not exist in law;
[T]he filling station was
constructed contrary to the town planning scheme of the local
authority and the zoning namely "business
one";
[T]he construction of the filling
station was commenced ... without any building plans having been
authorised by the local authority;
[T]he condition in the current
title deed was incorporated therein referring to the property being
capable of [being] utilised only
for trading purposes - which was
done unlawfully;
[A]ny current trading on the
premises of petroleum products and any other products will be
unlawful;
[T]he Controller approved the site
license application due to a clear misrepresentation made to Ms.
Keketi, that the ROD had not
lapsed at the time of her enquiry as to
its remaining validity;
[T]he construction of the filling
station and the streaming of the site occurred without a valid site
or retail licence having been
issued for such activities.
15
The
present appellants, as respondents in the court below, answered
Lepelle's founding affidavit comprehensively on the facts and
criticised Lepelle for, amongst other things, not utilising numerous
internal remedies other than those which we have mentioned.
The
internal remedies which Lepelle did utilise were all specifically
directed to the Minister and attacked the probity of the
site and
retail licenses. For present purposes, we need say no more than that
on the factual challenges, relating to zoning, permitted
use, alleged
misrepresentation and the like as set out in the preceding paragraph,
there is
no
balance
of probabilities in favour of Lepelle and the final word on these
maters must be left tot he reviewing court to determine.
16
Lepelle's case was significantly
narrowed by statements made by it in its replying affidavit.
[3]
Lepelle declared that the relief sought before the court below would
be limited to an interdict prohibiting further construction
of the
filling station and the retail sale of petroleum products. The relief
sought by Lepelle, it was said expressly, would therefore
not affect
the shopping centre. In apparent response to the internal remedy
criticism we have referred to in the previous paragraph,
Lepelle said
the following;
The [present appellants']
contention that [Lepelle] has failed to make use of any of the
numerous internal remedies, with regard
to the various administrative
processes, and further that [Lepelle] has also failed to initiate any
review applications of any
administrative decisions is misguided and
incorrect. Ancillary relief in Part 8 is only necessary to achieve
[Lepelle's] objective,
namely to have the site and retail licenses
set aside.
17
The court below was alive to what it
described as the contested issues in the application but concluded,
correctly, that they did
not take the "real issue" between
the parties any further in the light of an important admission made
by the present
appellants. It proceeded to determine this issue in
favour of Lepelle and then, having regard to the balance of
convenience, found
for Lepelle.
18
The real issue can be identified in the
light of appellants' counsel’s concession. A site license may
only lawfully be issued
to the owner of the property upon which it is
proposed that a filling station be constructed. Unless and until such
a site license
has been issued, no person may even begin constructing
a filling station on the property in question. Because Streaks was
not the
owner of the property when the site license was granted, the
site license was unlawfully issued and is invalid.
19
We pause to emphasise that the question
whether the site license issued to Streaks should be set aside or
whether. for example the
court should allow the license to be
transferred to the present owner of the property or postpone the
operation of its order for
relief pending proceedings to remedy the
defect arising from the invalid site license is not before us. These
are interim proceedings
for an interdict. The ultimate remedy down
the line arising from the invalidity of the site license is for that
court to decide.
20
The question before us, however, relates
to the legal consequence of the invalidity of the site license in a
particular context.
Lepelle contends that the invalidity of the site
license carries with it the inevitable consequence that the retail
license too
is invalid. The present appellants, on the other hand,
contend that the invalidity of the site license,
per
se,
has no effect on the validity of
the retail license. Despite the invalidity of the site license, say
the appellants, the sale by
Boroka of petroleum products is rendered
lawful by the terms of its retail license. Absent an unlawful act,
say the appellants,
there can be no unlawful competition and
therefore no interdict ought to have been granted.
21
It Is implicit in the reasoning of the
learned judge below that he resolved this issue in favour of Lepelle.
For what follows, it
is important that we emphasise that the learned
judge found that "no doubt can bethrown on [Lepelle's] case, be
it from a
factual or a legal basis" and that Lepelle had
"established a clear right of review"
[4]
22
The correctness or otherwise of the
learned judge's conclusion that, as a matter of law, the retail
license fell with the site license
is in our view decisive of both
the appeal in relation to the interdict and also to another question
which was raised by the court
to counsel before the hearing and
addressed by counsel in both written and oral argument.
23
The latter question is whether the
orders made by the learned judge in the interdict application are
appealable at all. This arises
because of a line of cases culminating
in the decision in
Cipla Agrimed
(Pty) Ltd v Merck Sharp Dohme.
[5]
The effect of this case is that under the common law, interim
interdicts properly so called are not appealable. The label attached
to the interdict is immaterial. What has to be determined is whether
the interdict in question is in any respect final in substance.
24
We consider that in two respects the
interdict, despite its form, was final in substance. Firstly, it
disposed of the legal issue
between the parties regarding the fate of
the retail license when the site license failed, Secondly, the order
of the court below
closed Boroka's business entirely and for an
indefinite period. There was no indication when adjudication of the
various proceedings
mentioned in the notice of motion would be
concluded. This was therefore not a case where a respondent subject
to an interim interdict
had to adjust the way it did business (eg. by
refraining
pendente lite
from
selling a certain product) but prevented the respondent from carrying
on business at all.
25
Counsel for Lepelle expressly refrained
from presenting oral argument on the appealability issue and left its
determination in the
hands of the court. We conclude that the
interdict order of the court below is indeed appealable. We now move
on to the determination
of what in our view was correctly called the
real issue between the parties.
26
The purposes of the Petroleum Products
Act appear from s 2,
[6]
which is headed Powers of Minister and others with regard to
petroleum Products. We quote s2 in full:
(1)
The Minister may by regulation or by
notice in writing served on any person, whether personally or by
post, and any person authorized
thereto by the Minister may by such
notice so served-
(a)
for the purposes of ensuring a saving
in, and the efficient use of, petroleum products, regulate in such
manner as he or she may
deem fit, including the imposition upon any
person of any duty in connection therewith, or prohibit-
(i)
the use of any petroleum product for any
purpose specified in the regulation or notice, as the case may be ,
or for the performance
of any act so specified In a manner so
specified;
(ii)
the purchase, sale, supply, acquisition,
possession, disposal, storage or transportation or the recovery and
re-refinement of any
petroleum product so specified;
(b)
for the purposes of ensuring an economy
in the cost of distribution of petroleum products or the rendering of
a service of a particular
kind or of services of a particular
standard, regulate in such manner as he may deem fit, or prohibit-
(i)
the supply to any person of any
equipment intended for the dispensing of any petroleum product;
(ii)
the establishment or creation of an
outlet for the sale of any petroleum product;
(iii)
the
transfer from one place to another of any business or undertaking
conducted at an outlet;
(iv)
the change of suppliers of petroleum
products to any business or undertaking conducted at any outlet;
(v)
the rendering of any service;
(vi)
the supply of petroleum products to any
business or undertaking conducted at any outlet at which any service
of a particular kind
or a service of a particular standard is not
available to the public;
(c)
prescribe the price, or a maximum or
minimum price, or a maximum and minimum price, at which any petroleum
product may be sold or
bought by any person, and conditions under
which the selling or buying of petroleum products other than in
accordance with the
prescribed, maximum or minimum price may take
place;
(d)
regulate in such manner as he may deem
fit, or prohibit, any business practice, method of trading,
agreement, arrangement, scheme
or understanding which, in the opinion
of the Minister, is calculated..
(i)
to Influence, or which may have the
effect of influencing, directly or indirectly, the purchase or
selling price of petroleum products
at any outlet; or
(ii)
to
cause, or which may have the effect of causing, directly or
indirectly, an increase in the price referred to in paragraph (c);
(e)
regulate in such manner as he may deem
fit the supply of any petroleum product to any business or
undertaking conducted at any outlet,
Including the imposition of
conditions relating to the price at which such product may be sold to
such business or undertaking
or at such outlet, or prohibit such
supply.
(f)
oblige
any person to publish the prices at which petroleum products are
available for sale including conditions relating to the
frequency of
such publications, its content and structure, the method and manner
of its publication and the displaying thereof;
(g)
prescribe the quantities of crude oil or
petroleum products to be maintained by any person.
(2)
Different regulations or notices may be
issued under subsection (1) in respect of different classes or kinds
of petroleum products
or services or different persons or categories
or groups of persons.
27
Section
2 confers very wide powers on the Minister to control and regulate
the use of and trade in petroleum products.
[7]
the section contemplates that aspect, of the petroleum products
Industry will be conduct d by businesses or undertakings, thereby
establishing the statutory foundation for the creation and operation
of the many filling stations throughout South Africa.
28
These
conclusions are reinforced by the provisions of ss 28 and 2C. In what
follows, we deal with the issuing of licenses under
the Act. In the
consideration of whether a specific license should be issued, effect
must be given to certain objectives. These
are promoting an efficient
manufacturing, wholesaling and retailing petroleum industry;
facilitating an environment conducive to
efficient and commercially
justifiable investment; the creation of employment opportunities and
the development of mall businesses
in the petroleum sector: ensuring
countrywide availability of petroleum products at competitive prices;
and promoting access to
affordable petroleum products by low-income
consumers for household use;
[8]
and the promotion of the advancement of historically disadvantaged
South Africans.
[9]
29
For
the purpose of controlling the use and trade in petroleum products, s
2 provides the Minister with two mechanisms. The Minister
has the
power. firstly, to regulate (ie promulgate regulations) generally;
and, secondly, the power to address specific situations
by notice
served on a person or persons. The Minister may also authorise others
to exercise the powers specified in such a notice.
Section 6
expressly confers on the Minister the power to delegate any of his
powers to any person and subject to any condition.
Specific instances
of the power to regulate, without derogating from the general power,
are set out ins 12C.
30
it
is important to emphasise that the PPA itself envisages that the
purposes of the Act may be achieved through regulation and through
notices. It Is difficult to conceive of any aspect of the industry
that the Minister cannot, notionally, regulate.
31
The
third respondent, the Controller of Petroleum Products (the
Controller) is an important functionary within the scheme of
administration
of the PPA. The Controller is appointed by the
Minister under s 3(a). Section 3 also makes provision for the
appointment of regional
controllers and inspectors.
32
The
PPA contemplates, as a primary mechanism for achieving the objects of
the Act, a system of licenses. Under s 2A(1), specific
categories of
activities may, in general, not be conducted except under a license
issued by the Controller. The text of s 2A(1)
reads:
(1)
A person may not-
(a)
Manufacture
petroleum products without a manufacturing licence;
(b)
wholesale
prescribed petroleum products without an applicable wholesale
licence;
(c)
hold
or develop a site without there being a site licence for that site;
(d)
retail
prescribed petroleum products without an applicable retail licence,
issued by the Controller of Petroleum Products.
33
The
manufacture of and wholesale trade in petroleum products are outside
the scope of this judgment. We are concerned with the licenses
contemplated in ss 2A(1)(c) and (d).
34
The
license contemplated ins 2A(1)(c) is called In the subsection itself
a site license. A site license empowers a person to
hold
or develop
a
site.
Site license
is not defined in the
PPA but
site
is
defined to mean premises on land zoned and approved by a competent
authority for the retailing of prescribed
[10]
petroleum products.
Hold,
when
used in relation to land, is defined to mean the owning of land for
the purpose of establishing a site.
35
Except
In the case of publicly owned land, a situation outside the scope of
this judgment, s 2A(4)(b) requires that the person who
has to apply
for a site license must be the owner of the property concerned.
[11]
36
Section 2A(1)(d) provides for retail
licenses. A
retail license
empowers
the holder to
retail prescribed
petroleum products. Retail
is
defined to mean the sale of petroleum products to an end-user at a
site.
Retailer
has
a corresponding meaning.
37
We
said that the general position was that activities identified in s
2A(1) may not be carried on except under license. Under s
2A(2)(a),
if a person engages in an activity contrary to s 2A(1), the
Controller must direct that person to cease such activity
forthwith.
However, under s 2 A (2 )( b), the Controller may allow a person
contemplated in s 2A(2)(a) to continue with the very
activity which
the Controller has directed should be ceased, pending an application
and the issuing of a license If the cessation
of such an activity is
likely to lead to a material interruption of the supply of petroleum
products.
38
If
any such application for permission to continue pending an
application and the issuing of a license is unsuccessful, the
Controller
must direct the person affected to comply with the license
and, if applicable, rectify any state of affairs resulting from such
contravention within the period stipulated by the Controller.
39
Under s 2A(3), if a person engages in an
activity in contravention of a license issued to that person, the
Controller must direct
that person to comply with the license and, if
applicable, rectify any state of affairs resulting from such
contravention within
the period stipulated by the Controller.
40
The
provisions of s 28(3) stand in apparent conflict with those in s
2A(3). Section 28(3) provides that a license issued by the
Controller
remains valid for as long as:
(a)
the lief:3nsee complies with the
conditions of the licence;
(b)
the licensed activity remains a going
concern, excluding a site; and
(c)
in the case of a site, there is a
corresponding valid retail licence.
41
We consider the effect of s 2B(3)(c)
below.
42
We have remarked that the PPA Itself
empowers the Minister to make regulations to give effect to the
purposes of the Act. Counsel
are agreed on the text of the
Regulations relevant to this appeal.
[12]
43
The Regulations prescribes the forms to
be used for applications for site and retail licenses.
[13]
Much information must be supplied by applicants for these licenses.
The license applications of Streaks and Boroka respectively
are
before us. In applying for its site license, Streaks provided its
personal particulars, an evaluation of the need for the development
of the site, the extent to which Streaks claimed that the grant to it
of a site license would promote the licensing objectives
of the PPA,
an analysis which demonstrated the viability of the proposed venture
and the promotion of employment opportunities
and its compliance with
the Petroleum Charter. The Regional Director. Petroleum Licensing for
Limpopo submitted a report supporting
the site license application.
The application showed that Streaks was the owner of the property
and, that relevant authorities
supported the zoning and permitted use
changes required and had considered the environmental impact of the
venture and approved
it.
44
In its application for retail license,
Soroka provided its personal particulars, a motivation for the
proposed retail activity and
what it believed would be the likely
economic viability of the retail venture, how the grant to it of a
retail license would promote
the licensing objectives of the PPA, the
identity of its proposed wholesale fuel supplier and the terms of its
Contractual relationship
with its supplier,
[14]
the legal basis on which it would occupy the site,
[15]
proof that it had available adequate start up funds, details of its
anticipated staff complement,
[16]
end proof of the approval of the proposed venture by zoning and
permitted use authorities.
45
We describe the detail of the
applications to demonstrate that the license, were not to be had for
the mere asking and that considerable
financial resources were
required to enable Streaks and Boroka to create infrastructures
adequate to give them any prospect of
success in their applications.
In .addition to what we have described guarantees for rehabilitation
of the site were also provided.
46
It is clear from the scheme we have described that the Controller
would not consider an application
for a site license unless it was
lodged together with an application for a corresponding retail
license. Indeed, reg 3(1)(2) prescribes
that the two applications
must be
lodged together. An
applicant for a site license
[17]
may not even commence with construction on the site until the
Controller has
granted a
site license,
47
Notice of the applications must be extensively advertised.
[18]
The Controller must verify
both the information supplied and that the notices were
published.
[19]
The site and retail
licenses, when granted, must be prominently displayed where any
person entering the site might read them.
[20]
[2
Regulations, the license does not
ipso facto
fail.
The Controller is instead vested with the power to cancel or suspend
the license.
[24]
Before the Controller may
exercise this power, however, the Controller must follow the
procedure prescribed by Reg 29(2). The licensee
must be informed of
the Controller's intention to cancel or suspend the license and the
licensee must be given an opportunity to
be heard. Thereafter the
Controller must consider remedial steps taken by the licensee and all
other relevant matters before the
Controller decides whether to
cancel or suspend.
50
The
Regulations provide for three specific situations in which a site or
retail licence will cease to be valid.
[25]
These are: if the license is surrendered to the Controller; if the
license is duly cancelled by the Controller; and if the licensed
activity is no longer a going concern.
[26]
51
Specifically,
false declarations do not
ipso facto
invalidate site or retail licenses.
Here again, the Controller is vested with a power, where the award of
a license was influenced
by a false declaration, including a material
non-disclosure, to act under Reg 29(2).
52
Against
this policy scheme, we proceed to consider the question we posed in
paragraph 20 above: whether, as Lepelle contends, the
invalidity of
the site license carries with It the inevitable consequence that the
retail license too must fall.
53
In
interpreting the PPA and the Regulations, we bear in mind that we
must undertake a unitary exercise, having regard to the text
of the
measures, their purposes and the context in which the interpretation
takes place. See
Natal Joint
Municipal Pension Fund v Endumeni Municipality
[27]
and the eases which followed this decision.
54
The
first paint we make in this regard is that the texts of the measures
under consideration do not support Lepelle's contention.
There is no
provision in either the PPA or the Regulations which prescribes that
if a site license is or becomes invalid, the corresponding
retail
license also becomes invalid.
55
Counsel for Lepelle urged us to find that the definition of
site
in s1 of the PPA supported Lepelle's contention. The submission
was that the “competent authority” In "premises...
approved by a competent authority for the retailing of prescribed
petroleum products" was the Controller. However, counsel’s
contention would make no grammatical sense. It would, for example,
require us to interpret s 2B(3)(c) as meaning that the subparagraph
should read
... in the case of a site on which
there are premises approved by the Controller for the retailing of
prescribed petroleum products,
there is a corresponding valid retail
license.
56
By the Controller approve the retailing
of products by issuing a retail license. Lepelle's submission would
also requires 2A(1)(c)
to read that a person may not "hold or
develop a site on which there are premises approved by the
Controll4'r for the retailing
of prescribed petroleum products.
without there being a site license for that site". The
subparagraphs read in this way would
create an absurdity.
57
In our view, the reference to "competent
authority" in the definition of "site" relates to the
zoning, permitted
use and environmental authorities and not to the
Controller.
58
We
therefore conclude that the text lacks any provision that supports
Lepelle's contention. Indeed, it seems to us that s 28(3)(c)
is
against Lepelle. That subparagraph provides in effect that a site
license only remains valid for as long as there is a valid
retail
license. There is no equivalent provision, that provides that a
retail license only remains valid for as long as here is
a valid site
license. This points toward a legislative intention to preserve the
validity of a retail license in the event of a
failure of the
corresponding site license.
59
And
indeed, there may well be good policy reasons why the Legislature did
not link the validity of a retail license to the validity
of the
corresponding site license. The PPA contemplates that in relation to
a specific site, the site and retail licenses may be
held by
different persons. It is difficult to see how the transformation
purposes of the measure, could be achieved if that were
not the case.
In this very instance, the site and retail licenses are held by
different persons.
60
A
site license may fall, or its provisions may be contravened, without
any corresponding fault on the part of the retailer. A retailer
might, and often would be, completely powerless to ensure that the
conditions of the site license were adhered to. It would be
a harsh
and Inequitable policy that put a retailer without more ado out of
business because its landlord was no longer the holder
of a valid
site license.
61
Lepelle's
contention would require us to find that the Legislature, by
necessary implication, legislated for the automatic invalidity
of a
retail license where the corresponding site license failed. We find
against that contention. We hold that the Legislature
did not
legislate for the automatic invalidity of a retail license where the
corresponding site license is or becomes invalid.
62
That
brings us to the position of the Controller in the legislative
scheme. The continuous supply of petroleum products to all those
persons who use those products to drive their vehicles and manage
their domestic lives is simply essential to the conduct of life
and
business in and the administration of South Africa. Without the
continuous and efficient production and distribution of petroleum
products, life in South Africa, as in most of the world, would be so
impoverished that the institutions which govern the country
would be
unable to function and life itself would become unbearable. To ensure
this purpose, the Legislature has opted for a scheme
in which the
Controller is empowered to deal with licensees
on
a case by case basis. The Act and
the Regulations consistently confer very wide powers on the
Controller to address situations in
which there has been
non-compliance with the PPA or the Regulations. As we have shown. the
Regulations (through Reg 30) provide
for termination of a license in
only three situations. The Controller has the power to compound
criminal conduct.
[28]
A powerful administrative tool is provided to the Controller in the
form of the power to issue directives
[29]
and the Controller may even allow a licensee to continue an activity
in contravention of the PPA pending remedial measures to achieve
compliance if by so doing a material interruption in the supply of
petroleum products may be avoided or mitigated.
63
Having
regard to the scheme and purposes of the Act, our view is that the
mere fact that there ie a non-compliance with a provision
of a
license or the absence of a site license corresponding to the
applicable retail license (or vice versa) will not, under the
PPA, of
itself bring an end to the license concerned but will afford grounds
for the Controller to intervene and use the powers
conferred on this
functionary under s 2A. This is, in our view, reinforced by the
provisions of s 2B(5) under which, to ensure
the continued operation
of a licensed activity and the prevention of hardship, the Controller
may, upon application, issue a temporary
license.
64
It
follows then, that the reference to validity ins 28(3)(c) does not
lead to the automatic termination of the site license in question
when there is no corresponding valid retail license. The Controller
is empowered to offer the holder of the site license an opportunity
to remedy the situation which arises when there is no corresponding
valid retail license.
65
We
therefore conclude that the purpose of the PPA and the Regulations
would not be advanced by Lepelle's contention. The text of
the
legislation, in context and its purposes all point in the opposite
direction. In our view, the question we posed regarding
the real
issue must be answered in favour of the present appellants. Boroka's
retail license did not become invalid because of
the invalidity of
the corresponding site license.
66
By
continuing to retail petroleum products where the corresponding site
license was invalidly issued, Boroka is, we find, not acting
unlawfully. There was therefore no unlawful competition. The
application for the Interdict should therefore not have succeeded
and
the appeal against the grant of the interdict must be upheld.
67
It
is therefore unnecessary to address the question of balance of
convenience. We would however say this: Lepelle has set out the
Inconvenience to itself if the interdict were not granted.
[30]
The considerations relied upon by Lepelle apply with equal force to
Boroka. However, the grant of the interdict would mean that
Boroka
would have to close down its business for a considerable period. That
would be devastating to Boroka and to its employees.
Closi!19 down
Boroka's business by order of court may mean that Boroka's licenced
activity is no longer a going concern, and trigger
the termination of
its retail licence under Reg 30(1)(c). The balance of convenience is
therefore strongly in favour of Boroka.
68
The appeal against the order holding Boroka in contempt remains for
consideration. The contempt
application was brought by Streaks
because Boroka refused to comply with the interdict order made by the
learned judge below during
the period from the date the interdict
order was made until the present appellants delivered their notice of
application for leave
to appeal against the interdict order.
69
The defence put up by Boroka was that it had obtained legal advice
that it need not obey
the interdict order while it was considering
whether it should appeal. That was however not the legal advice given
to Boroka. No
reputable lawyer would ever have given such advice. A
mandatory court order such as the interdict must be obeyed from the
instant
it is made and until it is set aside, suspended or lapses on
its own terms. In failing to comply with the interdict order, Boroka
simply put commercial considerations ahead of its obligation to obey
the order.
70
In addition to the contempt order,
Streaks sought and obtained a declaration in the Court below that the
interdict order did not
have the effect of a final judgment and a
punitive costs order.
71
In the light of our finding, the
interdict was indeed in certain respects final in effect. "the
declaratory order of the court
below must therefore be set aside.
That means that 8oroka was entitled to go to court to oppose the
contempt application. Although
the success enjoyed by 6Qroka in
regard to the declaration does not constitute substantial success. it
follows that the punitive
costs order was inappropriate. Costs of the
contempt application as between party and party should have been
ordered.
72
Erf
344 contended that it ought to have been awarded punitive costs in
the interdict application because there was no basis or seeking
relief against it, once the true factual position had been
established. If Erf 344 had confined itself to opposing the interdict
application as restricted in Streak's replying affidavit on the
simple ground that it was not a retailer of petroleum products,
there
might have been a basis for its contention regarding punitive
costs. But Erf 344 made common cause in the fullest sense
with the
other appellants in opposing the interdict application. The legal
questions arising from the invalidity of the site license
were not
straightforward. It cannot be said that Streaks acted
mala
fide
or inappropriately in bringing
the interdict application. We decline Erf E44’s request for a
punitive costs order,
73
We accordingly make the following order:
1
The appeal against the interdict order of 25 November 2016 succeeds.
The
order of the court below is altered to read: The application is
dismissed. The applicant must pay the costs of the first, second
and
sixth respondents.
2
The first respondent on appeal, Lepelle Industrial and Mining
Supplies CC.
must pay the costs of the first, second and third
appellants in relation to the appeal against the Interdict order.
3
In relation to the contempt order of 15
December 2016:
3.1
Paragraph 4 is set aside;
3.2
The easts order in paragraph 5 is
altered to read: The second respondent is ordered to pay the costs of
this application.
4
For the rest, the appeal against the contempt order is dismissed.
5
The second appellant must pay the costs of the first respondent on
appeal,
Lepelle Industrial and Mining Supplies CC, in relation to the
appeal against the contempt order.
6
For the 9uidance of the Taxing Master, it is recorded that 75% of the
time
taken up by the arguments on appeal was devoted IQ the appeal,
against the interdict order.
NB
Tuchten
Judge
of the High Court
27
March 2019
EM Kubushi
Judge of the High Court
27
March 2019
N Janse van Nieuwenhulzen
udge of the High Court
27 March 2019
For the first and second
appellants
Adv SD Wagener SC
Instructed by:
Gerhard Wagenaar Attorneys
Pretoria
For the third appellant:
Adv O van den Bogert
Instructed by:
Jacques Classen Attorneys
Pretoria
For the first respondent:
Advs R du Plessis SC, E van As and
RM Molea
Instructed by:
A Koek & Associates Inc
Roodepoort
[1]
120 of 1977
[2]
Para 183 of its founding affidavit. Subparagraph references omitted.
[3]
Paras 24
and 29 of Lepelle's replying affidavit
[4]
Paras 20 and 39
[5]
2018 6 SA 440
SCA
[6]
In what follows, all references to statutory material are to the PPA
and certain Regulations made pursuant to s 2.
[7]
Petroleum product is defined in s 1. It means any petroleum fuel and
any lubricant, whether used or unused,
and
includes any other
substance which may be used for a purpose for which petroleum fuel
or any lubricant
may
be used.
[8]
Section 2B(2)
[9]
Section 2C(a). Section 2C also requires the consideration of a
Charter
said
to be in Schedule 1 to the PPA. The affidavits
do not Include the Charter We were not referred to the Charter
during argument.
[10]
Prescribed
is defined in the PPA to mean prescribed by
regulation made by the Minister.
[11]
The basis upon which the appellants conceded that the site license
in this case was invalidly issued was that although Streaks
was the
owner of the property concerned when it made application for the
site license, it was not the owner when the license
was issued.
Lepelle contended that there were other grounds upon which we might
find that the site license had been invalidly
issued. Even if this
contention of Lepelle were correct, it would take the present case
no further.
[12]
Regulations Regarding Petroleum Products Site and Retail Licenses,
published under GN R286 in Government Gazette 28665 of 27
March 2006
as amended by GN R1081 in Government Gazette 35984 of 19 December
2012
[13]
Regs 3 and 15 respectively.
[14]
Total South Africa (Pty) Limited
[15]
A notarial lease with, Streaks for 15 years or until Boroka had
bought a minimum of 63 million litres of petrol and diesel from
its
wholesale supplier, with an option for a further five years. Boroka
had to build and fit out the site at its own cost to
enable it to
trade as a retailer and maintain the site in good repair and pay the
applicable rates and taxes.
[16]
Five women and 16 men, all previously disadvantaged persons.
[17]
Other than an applicant who falls under s 2D, the transitional
licensing provisions.
[18]
Regs 4 and 16
[19]
Regs 6 and 18
[20]
Reg 11
[24]
Reg 29(1)
[25]
Reg 30(1)
[26]
Reg 30(1)(c). We heard argument on whether when the carrying on of a
licensed activity is suspended by the court (eg where the
license is
interdicted from carrying on the activity), the licensed activity
thereby “is no longer a going concern”.
It seems to us
that there Is room for the argument that such a cessation of the
activity does not render the activity no longer
a going concern for
the purposes of the PPA. However, in light of the conclusion to
which we have come, it is not necessary to
decide this question.
[27]
2012 4 SA 593
SCA
[28]
Section 12(1)
[29]
Section 2A(3)
[30]
Paragraph 190 of Lepelle’s founding affiidvait