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[2008] ZAWCHC 93
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First Pharmacy CC v Shoprite and Checkers (Pty) Ltd and Another (17682/2008) [2008] ZAWCHC 93 (11 December 2008)
IN
THE HIGH COURT OF SOUTH AFRICA
(CAPE OF GOOD HOPE PROVINCIAL
DIVISION)
CASE
NO:
17682/2008
DATE: 11
DECEMBER 2008
In
the matter between
FIRST
PHARMACY CC APPLICANT
versus
SHOPRITE
and CHECKERS (PTY) LTD
1
st
RESPONDENT
ZININGI
PROPERTIES (PTY) LTD
2
nd
RESPONDENT
JUDGMENT
MOOSA.
J
:
This
is an application for an interim interdict in the form of
rule
nisi
in
terms of which the applicant seeks against first respondent an order
interdicting and restraining first respondent from operating
a
pharmacy or dispensing schedule
20
medicines
or conducting the business of a dispensary of pharmaceutical or
health products upon the premises of Shoprite Centre,
corner
Vryburger and Tafelberg Streets, Bothasig, Western Cape,
(hereinafter referred to as "Shoprite Shopping Centre")
and it also seeks other ancillary relief.
The
following facts are either common cause or not disputed.
(a)
On 8 December 2003, first respondent concluded a written lease with
Jean A de Klerk CC ("De Klerk CC"), in terms
of which it
leased the premises known as Shops 8 to 11, Shoprite Centre
(hereinafter referred to as the leased premises) for
a period of
three years commencing on 1 November 2003 and terminating on 31
December 2006. De Klerk CC had the right to renew
the lease for a
further period of five years. De Klerk CC established and
conducted a pharmacy under the name and style of
Bothasig
Apteek/Pharmacy from the leased premises.
(b)
The lease contained a special condition, namely:-
"There
shall, for the duration of the lease, be no
other pharmacy in
the shopping centre, nor will any
other person, excluding
medical doctors, be entitled
to
dispense schedule medicine as defined in the
Medicines
Control Act 1965. Bothasig Apteek shall have the sole right to
operate as a pharmacy."
(c)
During the currency of the said lease, first respondent sold the
shopping centre to second respondent and a reciprocal lease
was
concluded between them in respect of the premises from which first
respondent conducted its supermarket business. The
said lease was
for a period of 12 years with effect as from 1 November 2005.
(d)
The supermarket premises were let for the purpose of the lessee
carrying on the business of a supermarket, as well as allied
and
ancillary business thereto, including but not limited to the
business of a dispensary in pharmaceutical and health products.
The
said lease contained an exclusion to the effect that:-
"All
current tenants and their successors in title at the shopping centre
who are in contravention of the lessee's rights
to exclusivity shall
be permitted to continue trading and doing business as they
currently are."
(e)
On 7 June 2006 and during the currency of the aforesaid lease
agreement in respect of the leased premises, De Klerk CC sold
the
business of Bothasig Apteek/ Pharmacy to applicant as a going
concern, together with goodwill, fixtures, fittings and movables,
as
at the effective date of 10 September 2006, in terms of a written
agreement of sale. The value of goodwill paid by applicant
to De
Klerk CC was R200 000,00. The agreement of sale contained a
suspensive condition that the sale was subject firstly
to a new
lease agreement in respect of the premises being concluded between
the
applicant
and second respondent for a period of five years from the effective
date of the sale on no more onerous terms as that
in force in
respect of De Klerk CC, and secondly to the simultaneous
cancellation of the existing lease in respect of the leased
premises.
(f)
On 26 September 2006 applicant and second respondent concluded a
written lease agreement in respect of the premises for a
period of
five years with effect from 11 September 2006 and expiring on 21
August 2011, subject to the right of applicant to
renew the lease
for afurther period of five years.
An
agreement of cancellation of the existing lease was concluded
between second respondent and De Klerk CC which only became
effective with the signing of the new lease between second
respondent and applicant.
(g)
The same special condition relating to the exclusive right to
operate a pharmacy in the shopping complex as was contained
in the
original lease of De Klerk CC was replicated in the new lease of
applicant. It was quite clear from both the
new lease
agreement and the cancellation of the existing lease agreement
that the enforcement of the two agreements
were inter-dependent on
each other.
With
that background I turn to discuss the merits of the application. In
order to obtain the necessary relief, applicant ought
to establish;
firstly, that it has a
prima
facie
right;
secondly, that it has a well-grounded apprehension of irreparable
harm if the interim relief is not granted; thirdly, the
balance of
convenience is in favour of the granting of the interim relief; and
fourthly, the absence of any other
satisfactory remedy.I will
deal with each of these requirements.
1.
PRIMA
FACIE RIGHT
It
is common cause that up to the time applicant's rights were
allegedly infringed, it conducted the exclusive business of a
pharmacy at the shopping centre. Such right was conferred
on
it in terms of a lease concluded between second respondent and
applicant. Such exclusive business was conducted by applicant's
predecessor, namely De Klerk CC, from whom applicant acquired the
business which was conducted under the name and style of Bothasig
Pharmacy. The cancellation of the old lease concluded between first
respondent and De
Klerk
CC was dependent on the conclusion of a new lease between applicant
and second respondent. The same terms granting De
Klerk CC
exclusive rights to conduct a pharmacy at the shopping complex was
replicated in the new lease. In my view first and
second respondents
colluded with each other when they allocated unto themselves the
right for second respondent to grant and
first respondent to
receive the exclusive right to conduct the business of a pharmacy
in the shopping complex in the face of
such right being vested in De
Klerk
CC. Such unilateral conduct on the part of first and second
respondent was not only illegal and irregular, but was morally
and
legally indefensible. I therefore conclude that applicant has a
prima
facie
right
to the relief sought.
2.
APPREHENSION
OF IRREPARABLE HARM
The
applicant purchased the pharmacy business from its predecessor and
paid a substantial goodwill amounting to R200 000,00. The
sale was
conditional on the applicant obtaining a lease with similar rights
enjoyed by De Klerk CC. Applicant enjoyed such right
when he took
the business over from its predecessor. When applicant learnt that
first respondent intended opening a pharmacy,
it approached first
respondent, but first respondent denied such intention. When first
respondent had a change of heart, it failed
to inform applicant of
its change of heart. First respondent had knowledge, in my view,
that De Klerk CC and applicant had exclusive
rights to conduct a
pharmacy at the shopping centre. First respondent merely informed
second respondent of its intention to open
a pharmacy business in
the supermarket and advised second respondent to inform applicant
accordingly. Second respondent failed
to inform applicant of such
intention. A few days prior to first respondent opening the pharmacy
in the supermarket, the present
application was brought by the
applicant. I am satisfied that the applicant brought the
application as soon as reasonably possible,
after it became aware of
the fact that first respondent intended opening a pharmacy in the
supermarket.
First
respondent is a national chain of supermarkets with considerable
economic power and muscle. Applicant is a small business
enterprise.
I am of the view that should first respondent be allowed to continue
operating the pharmacy within the supermarket,
it will cause
irreparable harm to the applicant. With its economic muscle and
power it could squeeze applicant out of business.
In my view
applicant has well-grounded apprehension of irreparable harm if the
interim relief is not granted.
3.
BALANCE
OF CONVENIENCE
I
now turn to the question of the balance of convenience. Applicant
was conducting the pharmacy business for many years and it
predecessor for many years before that. The first mrespondent, by
opening a pharmacy in the supermarket, has infringed the
right of
applicant to conduct a pharmacy business exclusively in the shopping
complex.First applicant was aware that applicant
was conducting a
pharmacy business from the shopping complex. It had knowledge that
De Klerk CC had exclusive rights to conduct
the pharmacy as it
conferred such rights on De Klerk CC. It ought to have known that
applicant had similar rights as clause
7
of
the lease between it and
second
respondent as same provided for the right of De Klerk CC and its
successors to be protected. I conclude that balance of
convenience
favours the granting of the interim relief.
4.
ABSENCE
OF OTHER SATISFACTORY RELIEF
I
do not believe that applicant has any other satisfactory relief. A
claim for damages is not a realistic and practical alternative,
firstly because it will be difficult to quantify such damages, and
20
secondly,
applicant might be squeezed out of business by first respondent,
that it would not be in a financial position to take
first
respondent to court for a damages claim. In my view there are no
other satisfactory remedies available to applicant than
to grant the
interim relief.
Ms
Le Roux, SC
argued strongly that this matter should be referred to the
semi-urgent roll, because first respondent has already opened the
pharmacy and conducting such business from the shopping complex.
It would suffer harm because it has engaged staff which it
has to
lay off in the event of the first respondent being prevented
from conducting the pharmacy business from
the supermarket.
It is quite clear from the facts that first respondent
deliberately and at its peril went ahead to open
a pharmacy, being
well aware that an existing pharmacy with exclusive right was
operating a pharmacy business in the complex.
In my view far greater
harm could be caused to the applicant with an established pharmacy
business of many years standing. This,
in my view, makes the matter
one of extreme urgency and I am not inclined to refer the matter to
the semi-urgent roll for it
to be heard. Second respondent decided
not to oppose the application and correctly so. It is aware of the
collusion between it
and first respondent to illegally and
unilateral deprive De Klerk CC and its successors in title, being
the applicant, of the
sole right to conduct a pharmacy at the
shopping complex.
In
the premises I grant the following orders: (a) prayer 1 of the
notice of motion; (b) prayer 2 of the notice of motion,
which
shall be returnable on or before 5 February 2009 and
25
such
order shall include prayers 2.1, 2.2, and 2.3; (c) prayer 2.4 is
amended by [excluding that portion contained in the brackets
to the
effect that if the application is opposed by second respondent, then
first and second respondent shall jointly and severally
be liable
for payment of the costs]
5
ordering
first defendant to pay the costs of the application; (d) prayers 3
of the notice of motion; and prayers 5 of the notice
of motion
[except that the portion in brackets which does not form part of the
order as that relates to second respondent].
MOOSA,
J