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[2018] ZALMPPHC 44
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Seralor (Pty) Ltd and Another v Compredox (Pty) Ltd and Others (8142/2017) [2018] ZALMPPHC 44 (27 June 2018)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
LIMPOPO
DIVISION, POLOKWANE
CAS
E
NO: 8142/2017
In
the matter between:
SERALOR
(PTY)
LTD
1
ST
APPLICANT
EASTERN
BLUE INVESTMENTS 178
CC
2
ND
APPLICANT
And
COMPREDOX
(PTY)
LTD
1
ST
RESPONDENT
BOTTOM
LINE TRADING 19
CC
2
ND
RESPONDENT
NIKITA
JOHANNES
TSEBETSEBE
3
RD
RESPONDENT
ANNA-MARIE
NOLAN
N.O
4
TH
RESPONDENT
(ABSA
TRUST LTD) (on behalf of estate late
(GONSO
JULIUS NKOSI)
CAPENSIS
INVESTMENT 267 (PTY) LTD
5
TH
RESPONDENT
JUDGMENT
SEMENYA
J
1.
Ebenerzer Marais) (Marais, the deponent to the applicants’
founding affidavit, is the sole director and shareholder of
the 1st
applicant and the only member of the 2nd applicant. He launched this
application and deposed to the affidavit on behalf
of both
applicants.
2.
Marais alleges that on the 12 June 2012, the 2nd applicant entered
into a 9 year written lease agreement with the late Gonso
Julius
Nkosi in terms of which the 2nd applicant let Shampeni Filling
Station business premises (Shampeni) situated at 389 Ring
Road,
Daantjie Pienaar. The commencement date of the said agreement was the
11 June 2012. The parties agreed that the 2nd applicant
would have
the option to renew the lease of the premises for a further 10 year
period by giving the landlord notice of the exercise
of the option at
least 90 days before the termination date. The lease entitled the
lessee to sublet the premises without the lessor’s
consent. It
is common cause that the 4th respondent is the late Nkosi’s
successor in title.
3.
In the second lease agreement, the 1st applicant and the 5th
respondent entered into a written lease agreement in respect of
the
business premises known as TK Fillling Station situated at Erf 177A &
B, Zone 6, Extension 4, Sebe Street, Sebokeng (TK).
It was a 3 year
agreement with the 11 September 2015 as the commencement date. The
parties further agreed that the 1st applicant,
being the lessee would
have an option to sublet without the lessor’s consent and the
option to renew the agreement for a
further 3 years.
4.
The 3rd agreement involves the lease of business premises known as
Big Boy Filling Station (Big Boy) situated at Ga-Masemola.
It was a
24 months lease, with an option to renew 90 days before the
expiration of the initial term. The applicant avers that it
exercised
its option in a letter dated the 25 November 2015. As with the other
two agreements, the applicant is to sublet the premises
or part
thereof.
5.
The facts that led to the launching of this application, which are
either common cause or undisputed, are that the 1st and/or
2nd
applicants sublet the three business premises to the 1st respondent
between November 2015 and March 2016 in three separate
lease
agreements. According to the applicants, these three lease agreements
were all terminated on the 30 November 2017.
6.
It came to Marais’ attention that after the termination of the
agreements, 1st and/or 2nd respondents concluded lease agreements
with the 3rd and 5th respondents in respect of Big Boy and Shampeni.
The agreement between the 1st and/or 2nd respondents in respect
of TK
was that the 1st and/or 2nd respondents would continue to operate the
business on the said premises for the remaining 9 months
of the lease
agreement between the 5th respondent and the 1st applicant, but that
the rent would not be paid to the applicant.
7.
The applicants seek among others, an interdict prohibiting the 3rd,
4th and 5th respondents from breaching the lease agreements
that they
have entered into with the applicants. The applicants furthermore,
seek specific performance in the negative form i.e
non-performance of
the agreement between the 1st and/or 2nd respondent and 3rd, 4th and
5th respondents.
8.
Applicants allege that they have already entered into lease
agreements with other entities and that they may be held in breach
if
the 1st, 2nd, 3rd, 4th and 5th respondents are not interdicted.
9.
The deponent to the answering affidavit, Lazarus Selae Mphosi
(Mphosi), avers that the late Nkosi’s widow and the other
respondents have given Venn and Muller the power of attorney to
oppose the application. He further states that these persons were
unable to file confirmatory affidavits due to the urgency of the
matter. I however agree with counsel for the applicants’
contention that Mphosi cannot depose to an affidavit on behalf of the
3rd, 4th and 5th respondents for want of proper mandate to
do so.
Under these circumstances I will accept the applicants’
argument that the 3rd, 4th and 5th respondents are in effect
not
opposing the application.
10.
In his affidavit, Mphosi alleges that he is the managing member of
the 1st respondent and is deposing to the answering affidavit
on its
behalf. He further states that the 2nd respondents is a firm owned
and run by his brother, Theophilus, who is also in
possession/occupation
of Big Boy, Shampeni and TK.
11.
It would appear from Mphosi’s affidavit that the basis for the
opposition is three-fold. Firstly, it is alleged that the
three lease
agreements entered into between the applicants and the 1st
respondents were invalid ab initio and/or have already been
terminated. Secondly, that the said agreements are invalid in that
they were entered into in contravention of the Petroleum Products
Amendment Act 58 of 2003 (the PP A) and lastly, that the 1st
respondent or Mphosi do not believe that the applicants have sublet
the properties to third parties already, in view of the amounts the
applicants have charged these third parties as rent.
12.
The sections of the PPA which according to counsel for the 1st and
2nd respondents are relevant to the issues in this application
are 2A
(1), 2A (7) and 2B (2), (3) and (4) of the Act which provides as
follows:
“
Prohibition
of certain activities.-
2A
(1) A person may not-
(a)
Manufacture petroleum products without a manufacturing license;
(b)
wholesale prescribed petroleum products without an applicable
wholesale license;
(c)
Hold or develop site without there being a site license for
that site;
(d)
Retail prescribed petroleum products without an applicable retail
license, issued by the Controller of Petroleum Products.
(7)
A license retailer shall only purchase petroleum products from a
licensed wholesaler or a license manufacturer, or both.
2B
(2)
In considering the issuing of any license 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 country wide availability of petroleum products at
competitive prices; and
(e)
promoting access to affordable petroleum products by low-income
consumers for household use.
(3)
Any license issued by the Controller of Petroleum Products remains
valid from as long as-
(c)
in the case of a site, there is a corresponding valid retail license.
(4)
The Controller of Petroleum Products must issue only one retail
license per site.”
13.
Mphosi’s interpretation of the PPA is that, it is the
owner of the land only, who can hold a license (site licence)
to
erect a petrol filling station on the premises. It was further stated
that it is the owner of the land only who can hold or
issue a
petroleum retail licence. It was argued on behalf of the 1st and 2nd
respondents that since the applicants are not the
owners of the land
on which Big Boy, Shampeni and TK are situated; they therefore cannot
hold a site or retail licence. It is on
this basis that 1st and 2nd
respondents submitted that the lease agreements between the
applicants and them were invalid from the
beginning.
14.
It was submitted on behalf of the 1st and 2nd respondents that the
land and/or the site licences and/or retail licences on which
Big
Boy, Shampeni and TK are owned alternatively held by Mpakeni
Traditional Authority, the widow of the deceased Nkosi and the
5th
respondent/ Magaqa respectively, and not by the applicants. It is on
this basis that the respondents submit that section 2A
(1) (c) of the
PPA prohibits the applicants, who are not the owners of the land
and/or entities which are not the holders of a
site licence from
retailing in petroleum and can therefore not legally lease or
sublease the premises.
15.
Mphosi does not dispute the allegations that he had entered into
lease agreements with the applicants on behalf of the 1st respondent
in respect of the three filling stations. He however avers that he
remained on the property after the termination of the lease
agreement
in order to safeguard the premises. It was submitted on behalf of the
1st respondent that the evacuation of the properties
by the 1st
respondent would have endangered the 4th and 5th respondents’
license rights. Mphosi alleges that he remained
in occupation at the
behest of the land and business owners of the premises.
16.
Mphosi stated that the lease agreement between the applicants and the
4th respondent was terminated by the death of Nkosi. On
the other
hand, it was contended on behalf of the applicants that it is settled
law that Nkosi’s heir or successor in title
is bound by the
terms of the agreement.
17.
In PRINCIPLES OF THE LAW Sale and Lease, page 86, the authors states
the following:
“
Termination
by death
A
lease is terminated by the death of the lessor or the lessee if the
contract so provide. Furthermore, it will be terminated by
the death
of the lessor if the lease is at the will of the lessor, and by the
death of the lessee if the lease is at the will of
the lessee. Apart
from these instances, however, the death of a lessor or lessee has no
effect on the continued existence of a
lease – the rights and
duties of a deceased lessor or lessee pass to his or her heirs on his
or her death.”—Grobler
en Ander v Jacobs NO
1965 (4) SA
724
(O).
18.
In the absence of any facts to the contrary, I am inclined to accept
counsel for the applicants’ contention that the agreement
between the applicants and Nkosi, in respect of Shampeni, was not
terminated by Nkosi’s death. It is for this reason that
the 4th
respondent, as a representative of Nkosi’s estate, was cited as
a party. The respondents do not dispute the applicants’
contention that the winding up of Nkosi’s estate is still in
progress. The 1st respondent’s averment that the agreement
between the applicants and Nkosi has been terminated by Nkosi’s
death is therefore rejected.
19.
As already stated, the 3rd, 4th and 5th respondents are not opposing
the application. The fact that the lease agreements are
still of
force and effect, in as far as it relates to these respondents, is
therefore not disputed. In addition, the applicants
have attached
correspondence from these respondents’ attorneys which confirm
the fact the agreements are still in existence.
20.
Having found that the three agreements are still valid and running,
it remains to be determined whether they are null and void
for
non-compliance with the provisions of the PPA as contended on behalf
of the 1st and 2nd respondents.
21.
Counsel for the respondents argued that the agreements are invalid on
the basis that the applicants, not being the owners of
the premises
on which the filling stations are situated, are prohibited, in terms
of section 2A (1) ( c ) of the Act from holding
a site licence in
respect of Big Boy, Shampeni and TK. Counsel contended further that
the applicants are further prohibited from
acquiring a site licence
to retail in petroleum on the sites as they are no the owners of the
land.
22.
It is common cause that the lease agreements between the applicants
and the 1st respondent embodied clause to the effect
that the
premises shall at all times be used for the purposes of operating a
business of a filling station in terms of the site
licence and retail
licence only. Although not specifically stated, it seems to me that
it is not the 1st and 2nd respondents’
contention that during
the existence of the lease agreements, the applicants used the
premises contrary to this clause. In any
event, the applicants stated
that it was never their intention to retail in petroleum on the
premises. They were only interested
in the lease of the properties.
23.
The 1st respondent alleges that he entered into a ‘head
lease’ on behalf of a company he owns viz Rheiland
Investment
CC with the owners of Big Boy. Rheiland sublet the retailing to the
2nd respondent. The 2nd respondent is in the process
of applying for
the transfer of a retail licence. The 2nd respondent further entered
into a lease agreement with Nkosi’s
widow in respect of
Shampeni and with MAgaqa in respect of TK.
24.
It is evident that there are similarities between the contracts
entered into between the 1st respondent and 2nd respondent and
the
ones entered into by the applicants and the other respondents in this
application. This is so in that the second respondent
is similarly
neither the owner of the land on which the filling stations are
situated nor the holder of a site and retail licences.
If the 1st
respondent or Mphosi’s interpretation of the PPA is anything to
go by, neither the 1st nor the 2nd respondents
can lease or sublet
the premises on which these three filling stations are. It will also
follow that the agreemenst it has entered
into with the so-called
owners will be null and void.
25.
I am in agreement with counsel for the applicants that the
allegations made by the 1st respondent with regard to the agreements
entered into by the 1st respondent, the 2nd respondent and the owners
and/or holders of the land or premises are by themselves
confirmation that the contracts between the applicants and the
respondents are indeed valid.
26.
In Louistof v Snyders NO
[2016] ZASCA 182
[29 November 2016] the
court held that the site licence confers a personal right upon the
holder thereof which entitles the holder
to enter the site and to
prepare it for the purpose of retailing petroleum products at the
site, upon the granting of a retail
licence. It was further held that
there is no room to conclude that such rights are conferred on the
land owner only and not the
holder of the licence. In the present
matter, nothing precludes the third parties with whom the applicants
have entered into a
lease agreement from applying for a retail
licence if they intend to retail in petroleum. The applicants have in
any event stated
that they are not interested in retailing in
petroleum.
27.
In my view the fact that the applicants have rented the land from the
holders and not from the owners of the land is irrelevant
for the
determination of the issues in this matter which are whether the
lease agreements are valid or not. I agree with the applicants
in
this regard. It is not the applicants’ case that they are in
the business of retailing in petroleum. Nothing precludes
the
applicants from subletting the premises to the third parties in the
manner in which they have done in this matter. It is upon
the lessees
to acquire the necessary licences in compliance with the Act if ever
they intend to retail in petroleum.
28.
I further agree with the applicants that the 1st and 2nd respondents
have no locus standi to challenge the validity of the lease
agreements between the applicants and third parties simply due to the
amount charged as rent. The amount charged as rent is the
issue
between the parties to the contract only.
29.
I agree with the applicants that they have proved that they have a
clear right to the premises on which the three filling stations
are
situated by virtue of the valid lease agreements. I am further
satisfied that the conduct of the respondents injured the applicants
in that it interfered with their right to sublet the property to
whomsoever they wish in terms of the lease agreements. Launching
this
application is regarded as the only satisfactory remedy at the
applicants’ disposal-Setlogelo v Setlogelo
1914 AD 221.
30.
The conduct of the 3rd, 4th and 5th respondents amount to an unlawful
interference with the applicants’ use and enjoyment
of the
properties on which Big Boy, TK and Shampeni are situated. In their
prayers, the applicants applies that the court should
order that they
are entitled to possession of these properties. I am satisfied that
on the basis of the decision in Soffantini
v Mould
1956 (4) SA 150
E,
the applicants are entitled to enforce the contract entered into with
the 3rd, 4th and 5th respondents or to interdict them
from
interfering with this use and enjoyment.
31.
With regard to costs, I do not agree with counsel for the applicants
that the 1st and 2nd respondents acted mala fide in opposing
the
application. The agreements between the applicants and the 1st
respondents had already expired and they were free to negotiate
with
the owners of the properties for new lease agreements. I am of the
view that it is the 3rd, 4th and 5th respondents who had
a duty to
act in good faith and to refrain from entering into lease agreements
with other parties in the face of existing and valid
agreements with
the applicants. A punitive cost order would not be appropriate in the
circumstances.
32.
I am unable to find the relevance of the statutory provisions to
which I have been referred by counsel for the 1st respondent
to the
issues before me. The respondents were not allowed in law to enter
into lease agreements with each other in respect of the
premises in
view of the fact that the lease agreement between the applicants and
the 3rd, 4th and the applicants were still of
force and effect. I
find that the applicants are entitled to the relief sought.
33.
It is ordered:
33.1.
The lease agreements between the 1st alternatively 2nd applicants and
the 3rd, 4th and 5th respondents are
declared to be in esse and valid
and the applicants are entitled to rely on them;
33.2.
The lease agreements between the 2nd applicant, alternatively the 1st
applicant and 3rd, 4th and 5th respondents
are declared not to have
been validly cancelled and therefor subsist and are enforceable in
terms of the said agreements;
33.3.
The 1st, alternatively 2nd applicants, alternatively both applicants
are entitled to possession of the properties
as set out in the lease
agreements by virtue of the terms of the said lease agreements;
33.4.
It is confirmed that the lease agreements of the properties relevant
hereto between the applicants and the
1st respondent were validly
terminated on the 31 October 2017 with effect to 30 November 2017,
alternatively that the 1st respondent
has repudiated such agreements,
the repudiation having being accepted by the applicants;
33.5.
The 1st respondent, alternatively the 2nd respondent or anybody or
entity occupying the premises on behalf
of the 1st, alternatively the
2nd, alternatively the 1st and the 2nd respondents are ordered to
vacate or are ejected from the
premises of Big Boy Filling Station at
Ga- Masemola, Shampeni Filling Station at 389 Ring Road, Daantjie
Pienaar and TK Filling
Station at Erf 177A & B, Zone 6, Extention
4, Sebe Street, Sebokeng;
33.6.
The 3rd, 4th and 5th respondents are ordered to pay the amounts of
R14 520.00, R30 000.00 and
R35 000.00 (excluding VAT),
which are the amounts the applicants were supposed to receive as rent
had their use or enjoyment
of the property not been interfered with,
for the duration of the lease agreements term;
33.7.
The 1st and 2nd respondents are interdicted from negotiating with and
entering into lease agreements with
the 3rd, 4th and 5th respondents
for the lease of the properties known as Big Boy Filling Station,
Shampeni Filling Station and
TK Filling Station;
33.8.
The 1st and 2nd respondents are ordered to pay the costs of the suit
jointly and severally, the one paying,
the other to be absolved.
M.V SEMENYA
JUGDE OFTHE HIGH COURT; LIMPOPO
DIVISION
APPEARANCES
FOR THE APPLICANT
: ADV. JR MINNAAR
INSTRUCTED BY
: RIAAN
BOSCH ATTORNEYS
FOR THE RESPONDENTS :
ADV: BORRIS SAVVAS
INSTRUCTED BY
: VENN
& MULLER ATTORNEYS
DATE OF HEARING
: 18 APRIL 2018
DATE OF JUDGEMENT
: 27 JUNE 2018