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[2015] ZAGPPHC 529
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Cwa Snyders N.O Louis Snyders Familie Trust v Louistef (Pty) Ltd and Others (56178/2014) [2015] ZAGPPHC 529 (14 July 2015)
IN THE HIGH COURT OF
SOUTH AFRICA
(GAUTENG DIVISION,
PRETORIA)
REPUBLIC OF SOUTH
AFRICA
CASE NUMBER: 56178/2014
DATE: 14 JULY 2015
In the matter between:
CWA SNYDERS N.O. as trustee of
LOUIS SNYDERS FAMILIE
TRUST
....................................................................................
Applicant
And
LOUISTEF (PTY)
LTD
................................................................................................
First
Respondent
THE CONTROLLER OF PETROLEUM
PRODUCTS
......................................
Second
Respondent
MACROBERT
INCORPORATED
..........................................................................
Third
Respondent
JUDGMENT
JANSE VAN NIEUWENHUIZEN J
[1] The applicant claims the following
relief:
“1. An order declaring that the
agreement annexure "A” to the Applicant’s Founding
Affidavit is null and
void and of no force and effect.
2. The First Respondent pays the costs
of the Application. ”
[2] The first respondent opposes the
relief claimed by the applicant and has launched a counter
application in terms of which the
following relief is claimed:
”1. An order declaring that the
agreement, (annexures “A” and/or “RD”) was
legally and validly concluded
and was not null and void;
2. That the applicant be ordered to pay
First Respondent the amount of
R 1 000 000, 00 plus vat of R 140
000-00 against delivery of a valid tax invoice.
3. In the alternative to prayer 2
above:
3.1 that Applicant’s repudiation
of the agreement, First Respondent’s acceptance thereof, First
Respondent’s resiling
therefrom and its termination, be
confirmed;
3.2 That That (sic) Applicant be
ordered to pay the amount of R 1 000 000 - 00 (One Million Rand) plus
R 140 000, 00 to First Respondent
as liquidated damages;”
[3] The second and third respondents
filed notices to abide by the decision of the court.
FACTS
[4] The applicant is the owner of a
certain immovable property (“the premises”) in Brits. The
property has a filling
station (“the site”) from which
the first respondent has retailed petroleum products for a period of
approximately
13 years. For the aforesaid purpose the parties have
concluded consecutive lease agreements. In order to conduct the
business of
fuel retailing, the first respondent obtained the
necessary retail and site licenses prescribed by the Petroleum
Products Act,
120 of 1977 (“the Act”).
[5] According to the parties, the lease
agreement terminated at the end of April 2014.
[6] The applicant was eager to continue
with the filling station business and the third respondent, the
trust’s attorney at
the time, addressed a letter to the first
respondent requesting the first respondent to transfer the site
licence to the applicant
“in order to prevent the site license
from lapsing”.
[7] The first respondent was, however,
of the view that the site licence was its asset and refused to
relinquish or surrender the
licence.
[8] In view of the first respondent’s
attitude, the parties entered into a written agreement in terms of
which the applicant
purchased the site licence from the first
respondent for an amount of R 1 million.
[9] The Agreement contains the
following relevant clauses:
“3. INTRODUCTION.
3.1 The Seller conducts the business of
a fueling station at the Premises.
3.2 The Seller leases the Premises from
the Purchaser and the lease agreement terminates on 30 April 2014 and
the Seller will cease
the business on that date.
3.3 The Seller wishes to transfer the
Site License to the Purchaser in order to enable the Purchaser to
conduct a business of a
fueling station from the premises. ”
and
“4. SALE OF SITE LICENCE
The Seller hereby sells the Site
License to the Purchaser, who purchases same with effect from the
Effective Date. ”
[10] In pursuance of the agreement, the
applicant paid the purchase consideration of R 1 million into the
bank account of the third
respondent. The first respondent alleges
that it complied with its obligations in terms of the agreement by
“signing all
documents and delivering those documents, amongst
others, Annexure “RE”, together with the original site-
and retail
licenses to the Applicant, who on the strength thereof
represented to Second Respondent that this was an application for the
transfer
of a licence. ”
[11] Annexure “RE" refers to
the retail licence and contains a declaration to surrender the retail
licence. The present
operator of the filling station has applied for
a corresponding retail licence in its name.
[12] It is common cause that the second
respondent has issued a site licence to the applicant. It is,
however, not clear from the
facts whether the site licence would have
been issued without the existence of the written agreement.
[13] Prior to the purchase price being
paid to the first respondent, the applicant received legal advice to
the effect that the
written agreement is null and void and
unenforceable. As a result, the applicant instructed the third
respondent to withheld payment
of the purchase price.
DISPUTE
[14] The applicant alleges that the
agreement is invalid; null and void and unenforceable because a site
licence is not a res capable
of being sold.
[15] The first respondent contents that
the site licence forms part of its property, has a value and is
indeed capable of being
sold.
LEGAL PRINCIPLES
[16] In order for a contract to be
valid and binding, the contract must comply with certain
requirements. In Norman’s Law
of Purchase and Sale in South
Africa, RH Zulman, G Kairos, 5th edition, p. 2, the elements of a
contract of sale are stipulated
as follows:
“ (i) emptor et venditor (buyer
and seller - parties capable of entering into an agreement of sale)
(ii) the merx or res vendita (the thing
or things which form the subject matter of the agreement of sale)(see
for example Kriel
and Another
[2000] 2 All SA 65
(SCA));
(Hi) the pretium (the price in money or
which is readily ascertainable in terms of money). See the useful
discussion by Lubbe in
2000 Annual servey pp. 213-221;
(iv) consensus ad idem (the mutual
consent of the contracting parties).”
[17] In view of the dispute between the
parties, it is only the second requisite, to wit the merx or res
vendita that requires further
attention.
Merx or res vindita
[18] In Norman’s Law of Purchase
and Sale in South Africa, supra at p.21, a merx or res vindita is
described as follows:
“3.1 the second requisite of the
contract of sale is a thing which can be bought or sold, and which
may form the subject matter
of the contract. Paul pig 18.1.34.1)
says:
“Whatever can be held as private
property, or possessed, or sued for, may lawfully be sold; but things
which are withdrawn
form commerce, by the law of nature, or of
nations, or by public policy, are incapable of being owned by any
individual person,
such as the air, public streams or the sea, cannot
be bought or sold. ”
[19] Things falling in the first
category are referred to as res in commercio and things falling in
the latter category as res extra
commercio.
[20] In order to determine in which
category a site licence falls, the legislative framework pertaining
to the licence needs to
be considered.
PETROLEUM PRODUCTS ACT, 120 OF 1977
[21] Prior to the commencement of the
Petroleum Products Amendment Act, 58 of 2003 (“the Amendment
Act”) on 17 May 2006,
the retail of petroleum products in South
Africa was largely unregulated.
[22] The 2003 Amendment Act changed the
landscape of the petroleum retail industry in South Africa
drastically. The industry has,
subsequent to the amendment, become
highly regulated in the manufacturing, wholesaling and retailing of
petroleum products prescribed
by the Act.
[23] Section 2A(1) of the Act,
stipulates, inter alia, that a person must have a site licence to
hold or develop a site and must
have a retail licence to retail
prescribed petroleum products.
[21] Section 2A(4) specifies the type
of person who may apply for a licence. In respect of a site licence,
only the owner of the
property may apply.
[24] Section 2B of the Act makes
provision for the issuing of licenses and subsection (3) deals with
the duration of the validity
of a licence. The subsection reads as
follows:
(3) Any license issued by the
Controller of Petroleum Products remains valid for as long as-
(a) the licensee complies with the
conditions of the license;
(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 license. ”
(Own emphasis)
[25] Due to the fact that fuel
retailing businesses were in existence at the commencement of the
Act, the Legislator made provision
for transitional licenses in
section 2D of the Act. The section reads as follows:
“2D Transitional licensing
provisions.-(l) For the purposes of this section -
‘hold’ means to own or
lease land, or to possess an option to purchase land or lease land,
that has been zoned and approved
by appropriate authorities for use
as a site; and
‘process of developing’....
(2) Any person who, at the time of the
commencement of the Petroleum Products Amendment Act, 2003-
(a) holds and is in the process of
developing a site; or
(b) manufactures or wholesale petroleum
products, or retail prescribed petroleum products
shall, subject to subsection (3), be
deemed to be the holder of a license for that activity.
(3) (a) Any person referred to in
subsection (2) shall, within a period of
six months from the date of
commencement of this section, apply for a manufacturing, wholesale,
site or retail license, as the case
may be.
(b) Subsection (2) shall cease to apply
if the person fails to apply for A license within the period
contemplated in paragraph (a).
(4) (a) An applicant contemplated in
subsection (3) shall, on application, be entitled to be issued with a
license for the operation
of the
activity concerned if the applicant is
in compliance with all national, provincial and local government
legal requirement, that
are in force immediately prior to the
commencement of this Act for the operation of the activity concerned.
(b) Such applicant shall be subject to
the general conditions of a license set out in this Act, but not to
any financial security
requirement prescribed by regulation. ”
[26] The Act and regulations
promulgated in terms of the Act, differentiate between sites
established after the commencement of
the Amendment Act (“new
sites”) and sites that existed prior to the commencement of the
Amendment Act (“existing
sites”). Although only the owner
of land may hold a site licence in terms of section 2A (4) of the
Act, the transitional
arrangements contained in section 2D provides
that, subject to compliance with the relevant statutory requirements
contained in
section 2D, a lessee of land may also hold a site
licence. The requirements contained in the regulations for the
transfer of a
“new site” licence and the transfer of an
“existing site” licence also differ.
[27] Regulations to the Act were
promulgate by the Minister of Minerals and Energy in Government
Gazette, No 28665 on 27 March 2006
[Government Notice, No R 286]
[28] Regulation 12 applies to the
transfer of a site license. Regulation 12(1) applies to the transfer
of “new site”
licenses and regulation 12(2) and (3) to
the transfer of “existing site” licenses.
[29] Subregulations (2) and (3) reads
as follows:
“(2) In the case of a licence
issued to a person in respect of whom section 2D of the Act is
applicable, the site license
issued to-
(a) a land owner, must be transferred
to the new owner of that land; or
(b) a lessee, must be transferred to
the new lessee or to the new owner of that land.
(c) the provision of a certified copy
of the title deed or of the deed or of deed transfer or of the lease
agreement, to the Controller.
(Own emphasis)
[30] Subregulation (4) applies to both
new and existing site licenses and provides that the application for
the transfer of a licence
must be made within six months of taking
ownership or possession of the site.
APPLICANT’S CONTENTIONS
[31] In view of the provisions of
regulation 12, the applicant contends that the first respondent was
obliged to transfer the site
licence to the applicant. The applicant
further contends, that the site licence is attached to the site and
the first respondent’s
entitlement thereto seized when it
vacated the site.
[32] In the premises, the site licence
has no commercial value and is not a merx or res vendita for the
purpose of a valid sale
agreement.
FIRST RESPONDENT’S CONTENTIONS
Ownership of rights flowing from site licence
[33] The first respondent avers that
the rights flowing from the site licence belonged to it and was its
property.
[34] Regulation 38 deals with the
ownership of a licence and reads as follows:
“38. Any licence issued in terms
of these Regulations-
(a) Remains the property of the
Department of Minerals and Energy;
(b) may be cancelled or suspended at
any time subject to Regulation 29;
(c) May not be tempered with or defaced
in any manner; and
(d) May not be altered in any manner. ”
[35] The site licence therefore remains
the physical property of the Department of Minerals and Energy (“
the Department”).
Although the Department is the owner of the
physical licence, the question arises whether the first respondent
“owned”
any rights flowing from the licence.
[36] If regard is had to regulation 12
(2), such licence must be transferred to a new owner or new lessee,
when ownership or possession
of the site terminates. The licence is
therefore a statutory requirement granted to the owner or lessee of a
site in order to enable
the person / entity to retail petroleum
products from the site.
[37] If one have regard to the
statutory framework regulating the granting of a site licence, the
status of a site licence can be
equated to that of a liquor licence.
In Aquatur (Pty) Ltd v Sacks and Others
1989 (1) SA 56
AD, Vivier JA
at 64 H-l, described the status of a liquor licence as follows:
“A liquor licence, it has been
stated in decisions in this Court, is a purely personal statutory
privilege granted to a particular
person under the liquor laws to
sell liquor at particular premises. Its grant involves the exercise
by the licensing authorities
of a delectus personae so that the
licensee cannot transfer or otherwise deal with the licence unless
authorised thereto in terms
of the Act, which provides for the strict
supervision of the grant, transfer and removal of licences. ”
[38] In the premises, the first
respondent did not possess any rights flowing from the site licence
that was capable of being sold.
The act does not authorise the
selling of the site licence, but provides that the site licence must
be transferred to the new owner
or possessor of the site, once
possession of the site is relinquished.
Commercial value of site licence
[39] Apart from contending that it was
the owner of the rights flowing from the site licence, the first
respondent avers that the
licence has, in any event, commercial value
attached to it. According to the first respondent, the commercial
value emanates from
the fact that the site licence would have
terminated when it vacated the premises. In this regard the first
respondent relies on
regulation 30, which reads as follows:
“30. (1) A licence ceases to be
valid if-
(a) the licence is surrendered to the
Controller;
(b) the licence is cancelled by the
Controller in accordance with regulation 29(2); or
(c) the licensed activity is no longer
a going concern. ”
[40] The first respondent contends that
the fact that the site licence would have terminated, would have
entailed that the applicant
had to apply for a licence de novo.
[41] This would have been a cumbersome
and costly exercise. According to the first respondent, the applicant
would have had to:
“9.2.2 submit an environmental
management plan and provide proof of financial position for the
purposes of rehabilitation
as envisaged by regulation 14(b)(i) and
(ii)”
9.2.3 obtain a Record of Decision
(“ROD”) from the relevant authority on the basis of an
environmental impact study
in accordance with the Environmental
conversation Act, No 73 of 1989 as envisaged by regulation
13(1)(d)(ii);
9.2.4 prove to Second Respondent that
proper notice was given in terms of regulation 4 of the Regulations.
9.2.5 prove that a corresponding valid
retail application has been lodged for that site in terms of
regulation 5 of the Regulations
and in case of an application where a
site licence made by a person in respect of section 2D of the Act is
not applicable, that
there is a need for the site and that the site
will promote the licencing objectives stipulated for in section (B)
(2) of the Act;”
[42] In “selling” the site
licence to the first respondent, the licensed activity (retailing of
petroleum products),
however, remained a going concern and the
applicant did not have to apply for a licence de novo.
[43] Regulation 30 should, however, be
read in conjunction with regulation 12 which provides for the
transfer of a site licence
in circumstances where the owner or
possessor of the licence seizes to occupy the site.
[44] The two scenarios are distinct. If
a licensed activity seizes all together, it follows that the site
licence will no longer
be valid. If a new owner or lessee, however,
takes over the site, the licence must be transferred in terms of the
provisions of
regulation 12.
[45] The aforesaid conclusion
corresponds with the contents of section 2B (3) of the Act, that only
requires a corresponding retail
licence in order for a site licence
to be valid. As stated, supra, it is common cause between the parties
that an application for
a corresponding site licence has been lodged
in respect of the site.
[46] In the present circumstances, the
mere fact that the first respondent seized retailing operations when
it vacated the site,
does not mean that the site licence terminated
and has as a result a corresponding commercial value.
Regulation 12(2) not applicable to
applicant
[47] According to the first respondent,
regulation 12(2) does not apply in the present circumstances, because
the applicant is an
existing and not a new owner.
[48] I pause to mention that the
Controller of Petroleum Products deemed the transfer of the site
licence to be in accordance with
regulation 12(2)and (3). In a letter
dated 14 May 2014, addressed to Mr Snyders, the trustee of the
applicant, the Controller remarked
as follows:
“The Office of the Petroleum
Controller acknowledges your request for Site Licence Transfer
(S/2008/1777), from LOUISTEF (PTY)
LTD to LOUS (sic) SNYDERS FAMI LIE
TRUST.
In accordance with regulation 12 of the
Site and Retail Licence Regulations, please make a payment of R 500,
00 ”
[49] Payment of the R 500, 00
presumably represents the site licence fee referred to in regulation
12(3)(b).
[50] Insofar as regulation 12(2) does
not refer to an existing owner, a casus omissus exist.
[51] When legislation contains a casus
omissus, a court must decide whether it should “fill the gap”
or whether “filling
the gap” would amount to exceeding
its powers in terms of the interpretation of the separation of powers
doctrine. [See,
inter alia: Sleutelfontein (Edms) Bpk v Eerste
Nasionale Bank van Suider-Afrika Bpk
[1994] ZASCA 23
;
1994 (3) SA 407
(A)]
[52] When it is possible to cure the
casus omissus by interpreting the Act to give it a meaning which is
in accordance with the
rest of the Act, a court should not hesitate
to do so.
[53] In Vryenhoek and Others v Powell
NO and Others
1995 (2) SA 813
, the court discussed the interpretation
rule applicable to a casus omissus at 847 A-B:
“Devenish fop cit at 84) under
the heading ‘Interpretation by implication’ points out
that provisions which are
‘not enacted in express words may,
under certain circumstances, be deemed to be implied by means of the
process of curial
interpretation. ’ The implication must, of
course, from other parts of the statute (Steyn (op cit at 49) and
must be ‘a
reasonable and necessary one. ”
[54] In distinguishing between “new
site” licenses and “existing site” licenses, the
legislator created
two distinct scenarios to which different criteria
apply. “New sites” have more cumbersome requirements than
“existing
sites”.
[55] No reason appears from the Act and
regulations to distinguish between a new owner and an existing owner
of an “existing
site”. Having regard to the structure of
the Act and the regulations, it follows logically that the owner of
an existing
site should by implication fall within the provisions of
regulation 12(2) and (3). The fact that an existing owner of an
“existing
site” is not expressly referred to in
regulation 12, renders this interpretation reasonable and necessary.
[56] In view of the aforesaid
interpretation, the first respondent had a statutory obligation to
transfer the site licence to the
applicant.
CONCLUSION
[57] In the premises, I am of the view
that a site licence does not have commercial value and is not a merx
or res vendita. Consequently,
the sale agreement between the parties
does not comply with the essential elements of a valid sale agreement
and is null and void.
ORDER
I grant the following order:
1. The sale agreement between the
applicant and the first respondent in respect of the site licence for
Erf 2835, Brits JQ, North
West Province, is declared to be null and
void.
2. The first respondent is ordered to
pay the costs of the application.
3. The counter application is dismissed
with costs.
JANSE VAN NIEUWENHUIZEN
JUDGE OF THE HIGH COURT OF SOUTH
AFRICA
GAUTENG DIVISION, PRETORIA
Counsel for Applicant: Advocate B G
Savvas ATTORNEYS FOR THE APPLICANT:
VENN & MULLER ATTORNEYS
Counsel for the First Respondent:
Advocate JH Dreyer SC
ATTORNEYS FOR THE FIRST RESPONDENT:
LANGENHOVEN PISTORIUS & PARTNERS