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[2017] ZAGPPHC 69
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PE Convenience Centre (Pty) Limited v Martin and Others (61057/2013) [2017] ZAGPPHC 69 (28 February 2017)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
REPUBLIC
OF SOUTH
AFRICA
28/2/2017
Case
Number: 61057/2013
REPORTABLE
OF
INTEREST TO OTHER JUDGES
REVISED
PE
CONVENIENCE CENTRE (PTY) LIMITED Applicant
and
BEN
MARTIN
In
his capacity as
MINISTER OF
ENERGY
First
Respondent
JDG
PROPERTY
CC
Second
Respondent
BARLEDA
760 CC
Third
Respondent
JUDGMENT
JANSE
VAN NIEUWENHUIZEN J
[1]
The applicant seeks an order reviewing and setting aside a decision
of the first respondent's predecessor to uphold an appeal
lodged by
the second and third respondents against a decision of the
Commissioner of Petroleum Products ("the Commissioner")
to
deny their applications for a site- and retail licence.
[2]
The applicant is a licensed retailer of petroleum products and
conducts a filling station at 1 Wells Estate, St. Georges Strand,
Nelson Bay Municipality, Port Elizabeth.
[3]
The second and third respondents are desirous of operating a filling
station in the same vicinity to wit, on the corner of Buick
and Addo
roads, Markman Township, Wells Estate, Nelson Mandela Bay
Municipality, Port Elizabeth ("the site").
FACTS
AND STATUTORY FRAMEWORK
[4]
The retailing of petroleum products is regulated by the Petroleum
Products Act, 120 of 1997 ("the Act"). Until the
promulgation of the
Petroleum Products Amendment Act, 58 of 2003
, the
industry was relatively unregulated. The 2003 Amendment Act
introduced, for the first time, a licensing framework for,
inter
alia,
the retail of petroleum products. To this end sections 28,
2C and 2E of the Act read with the regulations promulgated in terms
of
the Act, introduced a licensing system regulating the retailing of
petroleum products.
[5]
In terms of the Act, a filling station must have a site license for
the immovable property from which the retailing will be
conducted and
a retail license for the selling of petroleum products. In terms of
section 28 of the Act, the Controller must issue
licenses in
accordance with the provisions of the Act.
[6]
In reaching a decision in respect of applications for a retail or
site license, the Controller takes various factors into account,
including but not limited, to the total mass or volume of petroleum
products sold by licensed retailers. [See: Section 2E (3) (d).]
[7]
The second and third respondents duly lodged the relevant
applications to obtain licenses in order to conduct a filling station
on the site with the Controller.
[8]
Once an application for a license has been filed with the Controller,
any person who wishes to object to the issuing of such
license, may
in respect of a site licence, in terms of regulation 4 and in respect
of a retail licence, in terms of regulation
16 of the regulations
promulgated in terms of the Act, file an objection.
[9]
The applicant duly filed an objection with the Controller, which
objection centred on the sales volumes of existing filling
stations
in the area of the proposed filling station. In this respect, the
applicant being an existing retailer had, manifestly,
an interest in
the opening of a further filling station.
[10]
The Controller upheld the applicant's objection and informed the
first and second respondents on 20 August 2012 that their
applications were unsuccessful.
[11]
Section 12A of the Act, which forms the subject matter of this
application, pertain to appeals against decisions of the Controller
and reads as follows:
"(1)
Any person directly affected by a decision of the Controller of
Petroleum
Products may, notwithstanding any other rights such a person may
have, appeal to the Minister against such decision.
(2)
An appeal in terms of paragraph (a) shall be lodged within 60 days
after such decision has been made known to the affected person
and
shall be accompanied by-
(a)
a written explanation setting out the nature of the appeal,·
(b) any documentary
evidence upon which the appeal
is based
(3)
The Minister shall consider the appeal, and shall give his or her
decision thereon, together with written reasons therefore
within the
period
specified in the
regulations.”
[12]
The second and third respondents duly filed an appeal within the
stipulated time period.
[13]
Neither the Controller nor the second or third respondents informed
the applicant of the appeal and consequently the applicant
was not
afforded an opportunity to study the grounds of appeal and the
further submissions submitted by the second and third respondents.
In
essence the appeal was adjudicated upon by the first respondent
without affording the applicant an opportunity to respondent
to the
grounds of appeal and the further submissions that were made.
[14]
The first formal notification the applicant received of the appeal
was by virtue of an e-mail received on 11 July 2013 from
Mr Cloete,
the Regional Energy Director for the Eastern Cape Region. The e-mail
stated the following:
''As
an interested and affected party, you are hereby informed that the
appeal submitted by the applicant against the refusal of their new
retail license was successful and that the Minister of Energy
has
subsequently granted both new site
and
retail licenses.
"
[15]
The fact that the applicant was only considered to be an
''interested
and affected”
party
after
the appeal was heard, is
somewhat peculiar.
SUBMISSIONS
AND DISCUSSION
[16]
The applicant submitted that the
audi alterem partem
principle
entrenched in the Constitution and given effect to in section 3(1) of
the Promotion of Administrative Justice Act, 3 of
2000 (PAJA), is
applicable to the appeal process and that the first respondent's
failure to adhere to procedural fairness renders
the decision to be
reviewed and set aside.
[17]
In support of its submission, the applicant relies on section 3(1)
and 3(2) of PAJA, which reads as follows:
"3.Procedurally
fair administrative action affecting any person
(1)
Administrative action which materially and adversely affects the
rights or legitimate expectations of any person must be procedurally
fair.
(2)
(a) A fair administrative procedure depends on the circumstances of
each case.
(b)
In order to give effect to the right to procedurally fair
administrative action, an administrator, subject to subsection (4),
must give a person referred to in subsection (1)-
(i)
adequate notice of the nature and purpose of the proposed
administrative action,·
(ii)
a reasonable opportunity to make representations,·
(iii)
a clear statement of the administrative action,·
(iv)
adequate notice of any right of review or internal appeal, where
applicable,· and
(v)
adequate notice of the right to request reasons in terms of section
5."
[18]
I pause to mention that only the second and third respondents oppose
the application, the first respondent having filed a notice
to abide
by the court's decision.
[19]
The second and third respondents' opposition to the relief claimed by
the applicant, is based on two grounds, to wit:
i.
the applicant does not have a statutory right to be heard during the
appeal process; and
ii.
the applicant has neither a right that has been adversely and
materially affected by the decision of the first respondent nor
a
legitimate expectation to be heard in the appeal process.
Statutory
right
[20]
The second and third respondents are correct, insofar as neither
section 12A of the Act nor the regulations provides for participation
in the appeal process by any party.
[21]
The question then arises whether the absence of such statutory right
excludes the applicability of the
audi alteram partem
principle.
In
South African Roads Board v Johannesburg City Council
1991
(4) SA 1
(A), the court held as follows at 10 G-1:
"...
a rule of natural justice which comes into play whenever a statute
empowers a public official or body to do an act or give a decision
prejudicially affecting an individual in his liberty or property or
existing rights, or whenever such an individual has a legitimate
expectation entitling him to a hearing, unless the statute expressly
or by implication indicates the contrary, ·
...”
[22]
Neither section 12A nor the regulations expressly prohibits the
participation of a successful objector in the appeal process.
In the
premises, the absence of a statutory right to be heard does not
exclude the rules of natural justice. [Also see:
Du Preez and
Another v Truth and Reconciliation Commission
[1997] ZASCA 2
;
1997 (3) SA 204
AD.]
Right
to be heard
[23]
The right to be heard only exists on the precondition that
''...the
administrative action
...
materially and adversely affect the
rights or legitimate expectations of the aggrieved
person.
"[See:
Walele v
City of Cape Town and Others
[2008] ZACC 11
;
2008
(6) SA 129
CC at para [28].]
[24]
Relying on the aforesaid decision, Mr Du Plessis SC appearing with Mr
Van As and Mr Molea for the second and third respondents,
submitted
that the decision by the first respondent to uphold the appeal and
grant licenses to the second and third respondents,
did not
materially and adversely affect any rights of the applicant. He,
furthermore, submitted that the applicant is not a party
to the
procedure between the first, second and third respondents.
[25]
According to the second and third respondents, the mere fact that the
applicant had a right in terms of regulation 4 and 16
to file an
objection to their application, does not confer any further rights on
the applicant to participate in the appeal process.
[26]
This notion was, however, dispelled in
Earthlife Africa (Cape
Town) v Director-General: Department of Environmental Affairs and
Tourism and Another
[2005] ZAWCHC 7
;
2005 (3) SA 156
C. Although the facts differ
somewhat, in that the regulation dealing with participation by
interested parties envisaged participation
through the whole process,
the concept of participation until the conclusion of a process was
upheld. The matter dealt with further
participation by interested
parties in terms of regulation 3(1)(f) of the regulations promulgated
in terms of the Environmental
Conservation Act 73 of 1989 (ECA),
which regulation provided for the participation of all interested
parties in all relevant procedures
contemplated in the regulations.
[27]
Eskom wanted to erect a modular reactor at its Koeberg Nuclear Power
Station and in order to get the necessary authority to
do so had to
submit an environmental impact report (EIR) with the relevant
decision maker. The regulations to ECA, which includes
regulation
3(1) (f) prescribed the procedures, submission and consideration of
EIRs.
[28]
A draft EIR was made available to the applicant and the applicant
filed submissions in respect thereof. Thereafter new facts
were added
to the EIR and submitted as a final document to the decision-maker,
without affording the applicant an opportunity to
respond to the new
facts contained therein.
[28]
According to the decision-maker, once the final EIR was submitted,
interested parties no longer had a right to participate
in the
proceedings. The court held as follows at 173 H - 174 A:
"......
In
these circumstances, I am of the view that the applicant, as an
interested party, was entitled, as part of its right to procedural
fairness, to a reasonable opportunity to make representations to the
DG on the new aspects not previously addressed in its submission
in
relation to the draft EIR."
[29]
Procedural fairness in South African Law depends on the circumstances
of each case. It has been held in numerous decisions
that fairness in
the context of administration law cannot be reduced to a
one-size-fits-all formula.
[1]
[30]
The concept of procedural fairness affords a party the opportunity to
participate in procedures that might impact on a variety
of such
party's interests. The only caveat is that the Administration should
not be overly burdened by the right to participate.
[31]
In the present instance the Legislator acknowledged through the
promulgation of regulation 4 and 16 that the interests of parties,
in
this instance more specifically existing filling stations, will be
affected by the issuing of further retailing licenses in
the same
area.
[32]
The fact that the first respondent considered the applicant as
''an
interested and affected party"
even after the appeal was
heard appears from the e-mail of Mr Earle Cloete (Regional Energy
Director of the Eastern Cape Region:
Department of Energy) dated 11
July 2013.
[33]
Section 12A, furthermore, makes provision for
"a written
explanation setting out the nature of the appeal"
and for
the submission of
"any documentary evidence upon which the
appeal is based"
[34]
The applicant's objection was based on the contents of the
applications submitted by the second and third respondents to the
Controller. The applicant's objection was upheld.
[35]
To allow the second and third respondent's to get a proverbial
second
bite at the cherry
without affording the applicant an opportunity
to respond to the further explanations and documentary evidence is
manifestly unfair.
[36]
In the premises, I am of the view that the appeal process followed by
the first respondent was procedurally unfair insofar
as the
applicant:
i.
did not get adequate notice of the appeal;
ii.
did not have access to the further documents filed by the second and
third respondents; and
iii.
was not given an opportunity to respond to the further explanations
and documentary evidence submitted by the second and third
respondents.
CONCLUSION
[36]
In the premises, the first respondent's decision stands to be
reviewed and set aside.
REMEDY
[37]
Section 8 of PAJA provides that a court may, in a judicial review in
terms of the Act, grant any order that is just and equitable
in the
circumstances. This discretion includes the right to set aside the
administrative action and to remit the matter for reconsideration
by
the administrator (section 8(1) (c) (i)).
[38]
Both parties submitted that this court should follow the route
envisaged in section (8) (1)(c)(ii), i.e to substitute the first
respondent's decision by a decision of the court.
[39]
As stated in the introductory portion to section (8) (1) (c) (ii),
this discretion will only be exercised in exceptional circumstances.
I am not convinced that such circumstances exist
in casu
and
am not prepared to exercise my discretion in this regard.
[40]
In order to provide clarity in respect of the appeal process, I am,
however, prepared to issue directions in terms of section
8(1) (c)
(i).
COSTS
[41]
The applicant sought a cost order against the first respondent
jointly and severally with any of the other respondents that
may
oppose the application. Mr du Plessis SC submitted that the second
and third respondents' opposition to the application was
well founded
and that a cost order against them should not follow. The fact of the
matter is, however, that the matter would not
have proceeded on an
opposed basis, if the second and third respondents did not persist in
their opposition of the application.
[42]
The applicant has been materially successful and I see no reason why
a normal cost order should not follow.
ORDER
In
the premises, I make the following order:
1.
The first respondent's decision to uphold the appeal of the second
and third respondents in respect of their applications for
retail and
site licenses in terms of the
Petroleum Products Act, 120 of 1977
is
reviewed and set aside.
2.
The matter is remitted to the first respondent for reconsideration.
3.
The first respondent is directed to afford the applicant a reasonable
period within which to file a response, if any, to the
applicant's
appeal, prior to reconsidering the matter.
4.
The first, second and third respondents are ordered to pay the costs
of the application, jointly and severally, the one to pay
the other
to be absolved.
_____________________
N
JANSE VAN NIEUWENHUIZEN J
JUDGE
OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
APPEARANCES
Counsel
for the Applicant
Mr
Gideon Erasmus (Right of appearance.)
Instructed by.
Erasmus
Attorneys (023 5411 900 / 082446 4424) Ref: No: GE/PE Markman Review
Counsel for the First
Respondent
The
first respondent no longer opposes the application
Instructed by.
State
Attorney's Office Ref: Ms J L de Lange/E Snyman/M
Masenamela
Counsel for the Second
and Third Respondents:
Advocate R du Plessis
SC, Advocate Evan As and Advocate M Molea
Instructed
by:
A
Kock & Associates Inc
(011
958 0700)
Ref: Mr R Kock/E121
[1]
See:
Du
Preez v Truth and Reconciliation Commission
[1997] ZASCA 2
;
1997
(3) SA 204
(A) at 231-3;
Premier,
Mpumalanga v Executive Committee, Association of State-Aided
Schools, Eastern Transvaal
1999
(2) SA 91
(CC) para 39;
President
of the Republic of South Africa v South African Rugby Football Union
2000 (1) SA 1
(CC) para
219;
Janse
van Rensburg NO v Minister of Trade and Industry NO
2001 (1) SA 29
(CC) para
24;
Permanent
Secretary, Department of Education and Welfare, Eastern Cape, v
Ed-U-College (PE
)
(Section 21)
Inc
2001 (2) SA 1
(CC) para 19;
Minister
of Public Works v Kyalami Ridge Environmental Association
2001 (3) SA 1151
(CC)
para 101
;
Chairman, Board on Tariffs and Trade v Brenco Inc
2001 (4) SA 511
(SCA)
paras 13 and 14;
Zondi
v MEG for Traditional and Local Government Affairs
2005
(3) SA 589
(CC) paras 113-14.12.