BP Southern Africa (Pty) Ltd v Cecelia Park Motors CC t/a Cecelia Park Motors (5395/2006) [2007] ZAFSHC 13 (15 February 2007)

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[2007] ZAFSHC 13
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BP Southern Africa (Pty) Ltd v Cecelia Park Motors CC t/a Cecelia Park Motors (5395/2006) [2007] ZAFSHC 13 (15 February 2007)

IN THE HIGH COURT
OF SOUTH AFRICA
(ORANGE
FREE STATE PROVINCIAL DIVISION)
Case No. : 5395/2006
In
the matter between:-
BP
SOUTHERN AFRICA (PTY) LTD
Applicant
and
CECELIA
PARK MOTORS CC t/a
Respondent
CECELIA
PARK MOTORS
_____________________________________________________
HEARD
ON:
25 JANUARY 2007
_____________________________________________________
JUDGMENT
BY:
VAN DER MERWE J
_____________________________________________________
DELIVERED
ON:
22 FEBRUARY 2007
_____________________________________________________
[1] The applicant is what
is commonly known as an oil company. It sells petroleum products
through a network of retail service stations.
Depending on the
nature of the contractual relationship between them and the applicant
(or the absence thereof) the operators of
the service stations are
referred to as dealers, franchisees or caretakers. The applicant is
the owner of fixed property known as
Plot 37, Quaggafontein,
Bloemfontein (“the property”). The property was developed in
order to be utilised as a BP service station.
Petrol and diesel
pumps, pumphoses and fittings, underground storage tanks and signage
and boarding bearing the BP name on the property,
are also the
property of the applicant.
[2] The service station
on the property was operated by the respondent as a BP service
station, supplied by the applicant, from 1989
to 3 January 2007, when
the respondent was interdicted from continuing to do so in terms of
the court order referred to below. The
respondent is however still
in occupation of the property. The present members of the respondent
close corporation are Mr. B.J.
Stander and his mother.
[3] It is common cause
that the applicant informed the respondent in writing that with
effect from 1 December 2006, all agreements
between the applicant and
the respondent in respect of the property and the service station are
terminated. It is also common cause
that thereafter the respondent
continued to operate the service station on the property with fuel
obtained from a different source,
notwithstanding the fact that on
all appearances, the service station was still a BP service station.
As a result the applicant
sought as a matter of urgency and obtained
on 22 December 2006, the following order:
“IT IS ORDERED
THAT:
1. .....................
2. A
rule nisi
be issued
calling upon the respondent to appear before this Court on 25 January
2007 at 10h00 and show cause, if any why an order
should not be made
in the following terms:
2.1 That the respondent and all those
holding title under it be ejected from the property situated at Plot
No. 37 Petrusburgpad, Quaggafontein,
Bloemfontein (“the property”)
2.2 That
the respondent be interdicted and restrained from:
2.2.1 holding itself out at the
property as a duly authorised dealer of the applicant entitled to
sell petroleum products to general
public,
2.2.2 selling
any petroleum products to the general public from the property,
2.2.3 utilising,
disposing of, or exploiting any of the BP trademarks, service marks,
trade names, logos, designs, symbols, emblems,
uniforms, as well as
the letters “BP”, the green and yellow BP colours and any other
insignia of BP.
3. Pending the final determination of
this application, paragraph 2.2 hereof operate as an interim
interdict, as from the 3
rd
of January 2007.
4. Costs
to stand over.”
[4] On the return date of
the
rule nisi
the applicant moved for the confirmation thereof
whereas the respondent asked that it be discharged with costs. In my
view the decisive
question is whether the respondent has any right of
occupation in respect of the property. If the respondent has no such
right of
occupation, it may also not do what it is interdicted and
restrained from doing in par. 2.2 of the
rule nisi
and the
rule nisi
must be confirmed
in toto
. On the other
hand, as will be mentioned hereinlater, the rights of occupation in
respect of the property relied on by the respondent
include the right
to be supplied with petroleum products by the applicant, so that in
the event of a finding or acceptance of such
right of occupation, the
rule nisi
must be discharged
in toto
.
[5] The question of the
onus in proceedings brought by an owner of property for ejectment
from that property, is settled. Such owner
need do no more than
alleged prove that it is the owner and that the respondent is in
occupation. The onus is then on the respondent
to allege and
establish any right to continue to hold the property against the
owner. If however the owner concedes a right of occupation
relied
upon by the respondent, but alleges that the right has been
terminated, the owner must prove the termination of that right.
If
on the other hand however the respondent does not invoke or rely upon
the right that the owner conceded the respondent would
have had but
for the termination thereof, the concession becomes mere surplusage.
See
CHETTY v NAIDOO
1974 (3) SA 13
(A) at 20 – 21.
[6] In an affidavit
supporting the application it is stated by Mr. P.L. van der Hoven
that the father of Mr. B.J. Stander was the
regional manager of the
applicant for the Free State Province. During 1989, after the
retirement of Mr. Stander Sr. from the service
of the applicant,
various agreements were concluded between the applicant and the
respondent (then controlled by Mr. Stander Sr.)
in respect of the
service station which had by then already existed on the property for
some time. These agreements between the
applicant and the respondent
included an oral agreement of lease of the property and the assets of
the applicant to respondent as
well as an agreement in respect of the
supply of petroleum products by the applicant for sale by the
respondent. In terms of these
agreements therefore the respondent
operated the service station on the property as a dealer under the
name Cecelia Park Motors.
Mr. Van der Hoven then states that, by the
end of August 2001 after the death of Mr. Stander Sr., all of the
agreements in terms
of which the respondent operated the service
station on the property as a dealer, had expired. Consequently, on
30 August 2001,
the applicant addressed a letter to the respondent
for the attention of Mr. Stander in the following rather inelegant
terms:
“
The
lease agreement between your father and BP has expired. The time BP
SA wants (sic) to renew it your father was in the hospital
and
presently he has passed away. BP SA does not have a lease agreement
with you and you have not yet been approved by BP SA to
become a
dealer therefore you are considered to be a Caretaker on a
month-to-month basis. The following procedure must be followed
for
the appointment of a new dealer at the site:
The site must be advertised
You have to apply like any other
person
Business plan and financial
statements must be submitted with the BP application form
Interviews will be conducted by a BP
appointed panel
The appointed dealer have to under go
training in Cape Town
I would like to take this opportunity
to thank you for having assisting (sic) us in running the business
temporarily until the new
dealer is been appointed.
We
will give you until 30 September 2001 to run the site and after that
the new appointed dealer or caretaker dealer will start to
operate
the dealership.”
According to the
applicant no new agreement as envisaged was entered into subsequent
to 30 September 2001. It is therefore the evidence
of Mr. Van der
Hoven, on behalf of the applicant, that subsequent to 30 September
2001 the respondent was allowed by the applicant
to operate the
service station as a caretaker on a month-to-month basis and that
this arrangement was terminated by notice by the
applicant to the
respondent with effect from 1 December 2006.
[7] On behalf of the
respondent it was contended that the content of the aforesaid letter
dated 31 August 2001 is inadmissible on
the basis that it constitutes
hearsay evidence and should be struck out. In this regard it must,
in my view, firstly be pointed
out that according to the affidavit of
Mr. Van der Hoven, the aforesaid facts contained in his affidavit are
within his personal
knowledge. He also states that after his
retirement from employment with the applicant at the end of July
2006, he had been contracted
by the applicant as a new site agent.
Prior to that, for the period November 2005 to end of July 2006, he
was the applicant’s
acting network manager for the inland region,
including the Free State. Before that he was employed by the
applicant as a portfolio
developer with the primary responsibility of
renewal of agreements and focusing on sale of properties owned by the
applicant at which
service stations or retail depots were operated.
On the other hand, Mr. Stander, on behalf of the respondent, does not
in his answering
affidavits deny that Mr. Van der Hoven has the
alleged personal knowledge. On the contrary, Mr. Stander accuses Mr.
Van der Hoven
of deliberately not telling the truth in this regard,
which would imply that he has knowledge of the truth. Although Mr.
Van der
Hoven did not state when he entered into the employ of the
applicant or precisely how he obtained the personal knowledge
regarding
the relationship and dealings between the applicant and the
respondent by 2001, there seems to be no reason to doubt that Mr. Van
der Hoven was in a position to have such knowledge.
[8] In any event I am of
the view that the contents of the aforesaid letter should be admitted
in terms of
section 3(1)(c)
of the
Law of Evidence Amendment Act, No.
45 of 1988
. Mr. Stander admits receipt of this letter. He says that
it was delivered to him by hand by the signatory thereof, who signed
the
letter as applicant’s business manager for the Free State and
Northern Cape. Mr. Stander expressly accepts that the letter
emanated
officially from higher ranking officials of the applicant
than the signatory thereof and says that he acted thereon as such.
Most
importantly in my judgment, as will be shown later, the truth of
the contents of this letter is not in reality disputed by the
respondent.
There can therefore be hardly any prejudice to the
respondent of the sort envisaged by
section 3(1)(c)(vi).
See
S
v SHAIK AND OTHERS
[2006] ZASCA 105
;
2007 (1) SA 240
(SCA) at 297 – 302 and
specifically at 301 G – H. Even though the absence of an affidavit
by the signatory of this letter is
not explained in the papers, I
consider the letter of such high probative value and the possibility
of prejudice to the respondent
so negligible, that it is in the
interest of justice that it should be admitted.
[9] In my judgment the
applicant established at least
prima facie
that the agreements
that entitled the respondent to occupy the property and to operate
the service station thereon, had expired by
the end of August 2001.
In response hereto, Mr. Stander on behalf of the respondent, states
the following:
“
I
immediately protested the letter with the rep but took it up with one
Dolf Sonnekus, then the interim chairman of the BP Dealer’s
Council. My father had been the Chairman prior to his death. The
said Dealer’s Council took the matter up on my behalf with BP
head-office and I was advised that BP’s primary objection was that
I had not, myself, undergone a training course with BP as required
for permanent dealers. It was then arranged that I should attend at
Cape Town, at BP’s head-quarters, and undergo the necessary
course.
This I did and I attach hereto as STA 1 a true copy of the
certificate issued to me by the Applicant. I therefore categorically
state that after completion of the course, I never again heard any
form of complaint from the Applicant and that business was conducted
by the Applicant with the Respondent on the basis that Respondent was
a fully enfranchised and permanent operator.”
This is summarised in a
supplementary affidavit as follows:
“
As
indicated in my founding affidavit, after the intervention of Dolf
Sonnekus the BP Dealers Council, it was agreed that all that
would be
required in order to restore the respondent’s status as a dealer,
was for me to attend training in Cape Town.”
[10] From what is stated
above, it is in my judgment clear that the respondent does not deny
the truth or correctness of the contents
of the letter of 30 August
2001, that the respondent does not as justification for its continued
occupation of the property rely
on any agreement entered into or in
existence before 31 August 2001, but that at best for the respondent,
it relies on a fresh agreement
with the applicant allegedly entered
into thereafter and in terms of which the respondent became a “fully
enfranchised and permanent
operator”: This is certainly not the
right of occupation conceded by the applicant. It follows that the
onus is on the respondent
to show that it obtained the alleged right
to the property against the owner. That the respondent in the manner
alleged and apparently
without any
quid pro quo
, became a
“fully enfranchised and permanent operator” of the service
station is in my view so highly improbable that it is one
of those
rare cases where it can be said to be clearly untenable and
unacceptable on the papers. At any rate, the probabilities
on the
totality of the evidence are overwhelming that the respondent was
simply allowed to remain on the premises on the basis stated
by the
applicant.
[11] However, what the
respondent particularly relies upon is a right of occupation of the
property and of operating the service station
resulting from the
alleged exercise of a right of pre-emption granted by the applicant.
It is not disputed by the applicant that
a pre-emptive right was
granted in the manner and on the terms set out below.
[12] The applicant
addressed a letter dated 24 May 2005 to Mr. Stander. This letter was
however only delivered to Mr. Stander on
12 July 2005. In the letter
the applicant informed Mr. Stander that the applicant had accepted a
written proposal that constitutes
an offer to purchase the property
for a purchase price of R1 024 000,00. The proposal constituted an
agreement in principle between
the applicant, Messrs H.F. Holtzhausen
and I.J. van der Walt acting as trustees of a trust, Double Step
Trading CC and Mr. Holtzhausen
in personal capacity. In accordance
with the proposal it was essentially envisaged that the applicant
will sell the property to
the aforesaid trust and that Double Step
Trading CC will operate the service station on the property in terms
of a supply agreement
with the applicant. The proposal was therefore
subject to suspensive conditions
inter alia
to the effect that
a deed of sale in respect of the purchase of the property for the
purchase price of R1 024 000,00 and the necessary
supply agreements
are entered into. A draft deed of sale which would have to be
entered into in order to fulfil the suspensive condition
in respect
thereof, was attached to the letter. In terms of this letter “the
pre-emptive right to match the proposal” in the
terms set out in
clause 12 of the proposal was granted. In clause 12.1 of the
proposal it was recorded that the applicant has granted
“..... to
certain Barend Jacobus Stander or any Company or Trust nominated by
him as (Owner and/or Dealer), the right of pre-emption
and/or right
to match .....” any agreement for the purchase of the property on
substantially the same terms and conditions as those
set out in the
proposal itself, including the conclusion of the supply agreements
referred to. Clause 12.2 of the proposal provided
as follows:
“
12.2 It
is specifically recorded that should Barend Jacobus Stander exercise
his right of pre-emption and/or right to match as aforementioned,
BP
shall subsequently be entitled to entertain and to enter into more
favourable or other agreements in BP’s discretion which the
said
Barend Jacobus Stander shall likewise be entitled to match upon the
same terms and conditions
mutatis
mutandis
as contemplated herein above. It follows from the aforegoing that an
Agreement or Agreements shall only come into force between
BP and
Barend Jacobus Stander pursuant to his exercise of right of
pre-emption and/or right to match should BP not after such exercise
enter into more favourable or other agreements as contemplated.”
[13] In my judgment, if
the right of pre-emption was properly or effectively exercised, it
would have resulted in a sale agreement
in respect of the property
and a supply agreement in respect of the service station between the
applicant and Mr. Stander or his
nominee. In terms of clause 2.1 of
the proposal the supply agreements were to commence on registration
of transfer of the property
into the name of the purchaser or any
earlier or later date upon which the purchaser obtains occupation of
the property. In terms
of clause 5.2 of the draft sale agreement it
is recorded that the purchaser shall be obliged to take occupation of
the property on
the date upon which the current occupant thereof
vacates same from which date the supply agreements shall come into
effect. I accept
that there is a necessary implication in all the
circumstances that in the event of the right of pre-emption having
been exercised,
Mr. Stander or his nominee would be entitled to
remain in occupation of the property and to be supplied with
petroleum products by
the applicant, pending the registration of
transfer of the property.
[14] The question then is
whether the right of pre-emption was exercised. In this regard the
onus is clearly on the respondent.
For purposes of deciding this
question, I accept that Mr. Stander intended the respondent to be his
nominee and that at all relevant
times hereto, Mr. Stander acted on
behalf of the respondent.
[15] In terms of the
aforesaid letter dated 24 May 2005 the right of pre-emption had to be
exercised within seven days of receipt
by Mr. Stander of a copy of
the proposal and the draft deed of sale. The draft deed of sale was
indeed attached to the letter.
It is common cause however that a
copy of the proposal was made available to the attorneys acting for
Mr. Stander by letter dated
28 July 2005 at their request therefor
per letter dated 15 July 2005. However, the applicant extended the
period for exercise of
the right of pre-emption to close of business
on Friday 26 August 2005. In my judgment therefore, the applicant
granted the right
of pre-emption per the letter dated 24 May 2005 in
the terms set out in clause 12 of the proposal however expiring by
close of business
on 26 August 2005. Despite several indications
that he intended to exercise the right of pre-emption, Mr. Stander
only purported
to do so by letter of 31 August 2005. As it was
purported to exercise the right of pre-emption when it was no longer
in existence,
the respondent did not on this basis establish a right
against the applicant.
[16] It
was contended however on behalf of the respondent that it must be
found that the applicant nevertheless accepted Mr. Stander’s
letter
of 31 August 2005 as proper or effective exercise of the right of
pre-emption. In this regard strong emphasis was placed
on the
aforesaid clause 12.2 of the proposal as well as the following letter
dated 13 September 2005 from applicant’s attorneys
to the attorneys
of Mr. Stander and/or the respondent.
“
Further to previous correspondence
in this matter, as contemplated in paragraph 12 of the letter
proposal dated 11 May 2005 addressed
by our clients, BP Southern
Africa (Pty) Ltd to Hercules Frederick Holtzhausen and Double Step
Trading CC, our clients have decided
to invite the said Holtzhausen
and Double Step Trading CC to offer a more favourable proposal in
regard to price, but substantially
on the same terms and conditions
otherwise. Our clients have decided to allow Holtzhausen and Double
Step Trading CC 30 (thirty)
days within which to make such more
favourable proposal.”
It was argued that in
terms of clause 12.2 of the proposal (containing part of the terms of
the right of pre-emption) this notification
of the applicant was only
necessary if the right of pre-emption had been exercised. Therefore,
according to the respondent, the
letter of 13 September 2005 shows
that the applicant accepted that the right of pre-emption had been
exercised. As a more favourable
or other agreement was not entered
into, so the argument went, a binding agreement between the applicant
and the respondent came
into existence. Viewed in isolation, this
argument appears attractive.
[17] There is however
strong evidence pointing the other way and indicating that neither
the applicant nor the respondent or Mr. Stander
regarded themselves
bound to an agreement of sale resulting from the exercise of the
right of pre-emption. The allegation that a
binding agreement
between the parties resulted from the exercise of the right of
pre-emption during August 2005, was made for the
first time in the
answering affidavit in these proceedings. This is so despite the
fact that the applicant and Mr. Stander communicated
with each other
on a number of occasions between August 2005 and December 2006 and
despite the fact that thereafter a number of letters
were written by
the attorney for the respondent in response to the notification by
the applicant to the respondent that all agreements
with the
respondent in respect of the property and the service station had
been terminated with effect from 1 December 2006, in which
the
position of the respondent in respect of the property and the service
station had been set out. Moreover, it is clear that over
a period
of more than a year after the binding agreement was allegedly entered
into, no steps whatsoever were taken by the applicant
or the
respondent or Mr. Stander to implement or enforce the provisions
thereof. It is further common cause that by letter dated
22 May 2006
the applicant invited Mr. Stander to make an offer for the purchase
of the property,
inter alia
in the following terms:
“
re: PROPOSED
SALE OF GARAGE PETROL FILLING STATION SERVICE PREMISES – STAND 37
QUAGGASFONTEIN 101 SMALL HOLDINGS BLOEMFONTEIN –
FREESTATE PROVINCE
trading as CECELIA PARK MOTORS
This
letter is addressed to you to inform you that we are considering
selling certain of our service station properties. One of the
properties that we consider selling is the abovementioned property
upon which the garage business conducted by you is situated.
As you
are aware, there is no legal obligation upon us to grant any prior
rights to anyone. Notwithstanding the aforegoing, before
we accept
any third party offer, we are prepared to entertain an offer from you
should you wish to make one.
We will entertain any offer made by
you before 5 June 2006. After that date, we may accept any other
offer at our discretion.
...............
No agreements, however, will be
entered into if, in our sole discretion, we conclude that it would
not be commercially viable for
you and/or us.
Whilst the agreements to be entered
into will provide that no alterations, additions or upgrades to the
premises can be made without
our written discretion, we emphasise
this for the sake of clarity.
All of the above decisions will lie in
our sole and absolute discretion. You should also be aware that
should we wish to entertain
an alternative offer from a third party,
we are entitled to do so.
Should
we consider allowing you an opportunity to match or improve upon such
alternative offer, we may do so at the time, but no undertakings
are
given in this regard. Should, however, we receive such a third party
offer and decide to allow you to match or improve upon
it, the terms
and conditions of such matching will be disclosed to you at that
time.”
The response of Mr.
Stander and the respondent was not what one would expect on their
version, namely indignation and immediate reference
to the existing
binding agreement. On the contrary, it is common cause that an offer
was in fact made on behalf of the respondent
pursuant to this letter,
which offer was not accepted by the applicant. The respondent was
notified hereof in a letter dated 22
June 2006 in the following
terms:
“
The price indicated by you to
purchase the above property is not acceptable to BP. We therefor
advise you that we will invite offers
from third parties.”
The undisputed evidence
of the conduct after 31 August 2005 of both parties, especially that
of the respondent, is therefore quite
inconsistent with the existence
of a binding agreement of sale in respect of the property.
[18] It is in my judgment
therefore not possible to find that it was shown on a balance of
probabilities that a binding agreement
of sale and supply came into
existence as a result of the exercise of the right of pre-emption.
The probabilities tend to favour
the applicant on this point but at
best for the respondent the probabilities are evenly balanced.
[19] It follows that the
rule nisi
must be confirmed. I do not think that either the
scope or the complexity of the matter justifies that the respondent
be saddled
with the costs of two counsel. The costs that stood over
on 22 December 2006 should follow the result.
[20] The
following orders are made:
1. Paragraphs 2.1 and 2.2
of the
rule nisi
dated 22 December 2006 are confirmed.
2. The
respondent is ordered to pay the costs of the application including
the costs of 22 December 2006.
________________________
C.H.G.
VAN DER MERWE, J
On behalf of the
applicant: Adv. P.B. Hodes SC
and R.J. Howie
Instructed
by:
Israel
Sackstein Matsepe Inc BLOEMFONTEIN
On behalf of the first
respondent: Adv. N.P.G. Redman
Instructed
by:
Saffy
& Associates
BLOEMFONTEIN
/sp