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[2024] ZANCHC 88
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Desert Oil (Pty) Ltd v OP Bathlaro Filling Station (Pty) Ltd and Others (2161/2024) [2024] ZANCHC 88 (18 September 2024)
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTHERN CAPE
DIVISION, KIMBERLEY)
Case No: 2161/2024
Reportable:
YES / NO
Circulate
to Judges: YES / NO
Circulate
to Regional Magistrates: YES / NO
Circulate
to Magistrates: YES / NO
In
the matter between: -
DESERT
OIL (PTY)
LTD
APPLICANT
and
OP
BATHLARO FILLING STATION (PTY) LTD
FIRST RESPONDENT
ANDREW
TEBOGO KESIAMANG
SECOND RESPONDENT
TOTALENERGIES
MARKETING SOUTH AFRICA
(PTY)
LTD
THIRD RESPONDENT
Neutral citation:
Desert Oil (Pty) Ltd v OP Bathlaro Filling Station (Pty) Ltd and
two Others (Case number 2161/2024)
Heard:
13 September 2024
Delivered:
18 September 2024 electronically
Coram:
Stanton J
ORDER
1.
Pending the final determination of an action to be instituted by the
applicant
against the first and second respondents claiming
declaratory and consequential relief in terms of
section 20(9)
of the
Companies Act 71 of 2008
: -
1.1
The first and second respondents are interdicted and restrained from:
-
1.1.1
entering into a fuel supply agreement with the third respondent
and/or with any person other than the applicant;
1.1.2
implementing any fuel supply agreement which may have already been
concluded with the third respondent or
with any other party;
1.1.3
in any way interfering with, hindering or preventing the ongoing
supply of fuel by the applicant to the
business conducted in
Bathlaros under the name “OP’s Filling Station” or
OP Filling Station, including but not
limited to, ceasing the
operations of the business;
1.2
The first and second respondents shall do all things necessary to
finalise the application
for, and the issue of, a valid fuel retail
licence in the name of the first respondent for the operation of the
business;
1.3
The first and the second respondents shall comply with all the
provisions of the supply
and operating agreement concluded between
the applicant and OP’s Filling Station (Pty) Ltd on 30
September 2016;
1.4
The first and second respondents shall not purchase, and/or permit
the purchase, of fuel
for sale in the business from any supplier
other than the applicant;
2.
Summons in the action shall be issued and served within 30 calendar
days of the date of this
order, or such longer period as the parties
may agree to in writing or the Court may order on application, on
good cause shown,
failing which, the orders as set out in paragraphs
1.1 to 1.4 shall lapse; and
3.
The costs of this application shall stand over for determination in
the action.
JUDGMENT
Stanton J
Introduction: -
[1]
On 19 August 2024 the applicant, Desert Oil (Pty) Ltd
(“
Desert
Oil”
)
issued an application for interlocutory
interdictory relief on a truncated timeline. In its notice of motion,
Desert Oil requests
the following relief: -
1.1
That the applicant’s failure to
adhere to the forms and time periods provided for in the Uniform
Rules of Court and the hearing
of this matter as one of urgency in
terms of Rule 6(12) be condoned;
1.2
Requesting a rule nisi, calling upon the
respondents to show cause, on a return date to be set by the Court,
as to why the Court
should not make an order pendente lite that,
pending the final determination of an action to be instituted by the
applicant against
the first and second respondents (jointly ‘the
respondents’) (on or before a date to be determined by the
Court) for
various declaratory orders in terms of section 20(9) of
the Companies Act 71 of 2008 (“the Companies Act”) (“the
action”), the respondents, together with the third respondent,
TotalEnergies Marketing South Africa (Pty) Ltd (“Total”),
where applicable, are interdicted and restrained from: -
1.2.1
entering into a fuel supply agreement with
Total and/or with any person other than the applicant;
1.2.2
implementing any fuel supply agreement
which may have already been concluded with Total or with any other
party;
1.2.3
in any way interfering with, hindering or
preventing the ongoing supply of fuel by the applicant to the
business conducted in Bathlaros
under the name OP’s Filling
Station (“the business”), including but not limited to,
ceasing the operations of
the business;
1.3
The respondents shall do all things
necessary to finalise the application for, and the issue of, a valid
fuel retail licence in
the name of the first respondent for the
operation of the business;
1.4
The respondents shall comply with all of
the provisions of the supply and operating agreement concluded
between the applicant and
OP’s Filling Station (Pty) Ltd on 30
September 2016 (“the agreement”);
1.5
That prayers 1.2 to 1.4 shall operate as a
temporary interdict, pending the final determination of the rule
nisi
; and
1.6
The costs of this application shall stand
over for determination in the action, save for in the event of
opposition to the relief
sought, in which case the costs occasioned
by such opposition are to be borne by the party opposing.
[2]
The respondents filed their answering affidavit without taking issue
with the request
for condonation and Desert Oil filed its replying
affidavit. Total filed a notice of intention to abide. I accordingly
dealt with
the matter without making a finding in respect of urgency
and in view of the fact that the matter was properly ventilated, I
find
it prudent to adjudicate this application without issuing a rule
nisi
.
Brief factual history:
-
[3]
The following are the undisputed salient facts: -
3.1
Desert Oil carries on business as a “branded marketer” of
Astron Energy (Pty)
Ltd, previously Caltex, for the Northern Cape
Province and is a wholesale supplier of Astron or Caltex branded
petroleum products;
3.2
Desert Oil supplied petroleum products to OP’s Filling Station
(Pty) Ltd (“the
Old OP company”) in terms of the
agreement that was concluded during September 2016 for a period of 20
years, thus expiring
on 31 August 2036;
3.3
The Old OP company, registered and incorporated during 2003, has a
current CIPC status as
“Annual Return Final Deregistration”,
with Mrs. AM Kesiamang as its sole director, the other four erstwhile
directors,
which include the second respondent, Mr AT Kesiamang (“Mr
Kesiamang”); having resigned on a date not reflected in the
CIPC document;
3.4
The first respondent, OP Bathlaro Filling Station (Pty) Ltd (“the
New OP company”)
was incorporated and registered on 27 July
2022 with Mr Kesiamang as its sole director;
3.5
On 03 July 2007 the Department of Mineral Resources and Energy (“the
DMRE”)
issued site and retail licences (“the licences”)
to Mr Kesiamang’s father, Mr. OP Kesiamang, who passed away on
02 November 2009. On Mr. OP Kesiamang’s death, Mrs. A
Kesiamang, Mr. Kesiamang’s mother was appointed as the executor
of his deceased estate;
3.6
The licences have never been transferred to the Old OP company;
3.7
A caretaker operator, Mr J Leach, operated the business from 01
May 2017 to 30 April
2019, which caretaker agreement was renewed in
2019 for a further period of 01 June 2019 to 31 May 2021 (“the
caretaking
periods”). The agreement was amended twice to
provide for the caretaking period. The amended agreement provided
that: -
‘
1.3
For a
period of 24 months from 1 May 2017
(Caretaking Period), the Operator shall allow the Company, in its
sole discretion, to appoint
a third-party franchisee to operate the
Filling Station Business in terms of a Caretaker Agreement
(“Caretaker Franchisee”).
During the caretaking period: -
1.3.1
all the rights and obligations of the Operator and the Company in
terms of this Agreement shall be suspended;
1.3.2
the Company and the Operator will negotiate in good faith to agree
the redevelopment that is required at
the Premises comprising inter
alia, the replacement of tanks. For the avoidance of doubt, this
Agreement continues in full force
and effect subsequent to the
expiration of the Caretaking Period, including all the rights and
obligations of the Operator and
the Company in terms of this
Agreement, regardless of whether any redevelopment of Premises is
carried out;’
3.8
On 21 July 2024 Ms. T Khobane, on behalf of the New OP company,
addressed an email to Desert
Oil’s director, Mr. F Johnson, and
its general manager, Ms. K Mallick, to which email a document
entitled “Request
for Proposal” (“the RFP”)
was attached. In the RFP, the New OP company states that the executor
of Mr OP Kesiamang’s
estate has obtained a new site and retail
licence in the name of the New OP company; and it requested proposals
from licenced wholesale
petroleum companies with efficient
distribution networks/depots; and wide distribution of branded
service stations.
[4]
The issuing of the RFP prompted this application to be issued on an
urgent basis.
Applicable law: -
[5]
The four requisites for the granting of an interim interdict are
trite
[1]
: -
5.1
A
prima facie
right that might be open to doubt;
5.2
Apprehension of irreparable harm;
5.3
Balance of convenience; and
5.4
No alternative remedy.
Ad prima facie right:
-
[6]
A court must be satisfied that the applicant has a right established
on a balance
of probabilities and that the respondent has invaded it
or threatened to do so.
[2]
Unterhalter J, as he then was, writing for the minority, succinctly
summarised the law pertaining to this requirement in
Eskom
Holding
s
SOC Ltd v Vaal River Development Association (Pty) Ltd and Others
[3]
as follows: -
‘
A
very long line of cases, stretching back to the authoritative
pronouncement of our modern law in Setlogelo, has made it plain
that
a prima facie right, though open to some doubt, is the
standard used to assess the applicant’s prospects of
success in
obtaining final relief. The enquiry is of necessity provisional
because the available evidence is usually incomplete,
untested under
cross-examination (where there are disputes of fact), and the case
may yet be more fully developed.
What
the standard requires has given rise to no small measure of
difference. According to Webster v Mitchell, as qualified
in Gool, the test is whether the applicant has furnished proof
which, if uncontradicted at trial (here in the review), would
entitle
the applicant to final relief. The Court will then consider the case
of the respondent to decide whether it casts serious
doubt on the
case of the applicant. If it does, the standard is not met.
In Ferreira, a majority of a Full Court considered
this test to
be too exacting. It held that the prospects of success of the claim
for the principal relief, albeit weak, may nevertheless
suffice. This
is so because other requirements for the grant of an
interim interdict may be strongly grounded and hence compensate
for the weakness as to prospects. This, it was thought better chimed
with the holding in Eriksen Motors. More recently,
this Court, in Economic Freedom Fighters
held that—
“
before
a court may grant an interim interdict, it must be satisfied that the
applicant for an interdict has good prospects of success
in the main
review. The claim for review must be based on strong grounds which
are likely to succeed. This requires the court adjudicating
the
interdict application to peek into the grounds of review raised in
the main review application and assess their strength. It
is only if
a court is convinced that the review is likely to succeed that it may
appropriately grant the interdict.”
What
all of these cases make clear is that to secure interim relief,
an applicant must establish their prospects of success
of obtaining
final relief to the required standard. Without that showing, there is
no basis upon which a respondent can be required
to endure the
strictures of an interim order, pending the final determination of
the case for final relief. And even if the
standard is
satisfied and the applicant is granted an interim order, the order is
generally subject to the following condition.
If the applicant
ultimately fails in the main action, they will be liable for the
damages that the respondent may have suffered
as a result of the
imposition of the interim order. This is a further demonstration of
the manifest connection between the grant
of interim relief and the
likely outcome of the proceedings that will finally determine the
matter.
In
sum, the following may be said of this account of our law. First, an
application for interim relief is decided upon a consideration
of the
applicant’s prospects of success in obtaining final relief. The
prima facie right, though open to some doubt, that
must be
established to obtain interim relief is the right that is the subject
of the main action (or proceedings)… Hence,
an application for
interim relief is never decided on some separate consideration of
rights unrelated to the claim for final relief.
…
Second,
it is axiomatic that if an applicant cannot prove that they have a
clear right, the very nature of satisfying a court that
they have
a prima facie right, though open to some doubt, is a
provisional judgment. The court that finally determines
the
matter will decide whether the right, that the applicant relied upon
to secure interim relief, has been proven on a balance
of
probabilities so as to secure final relief…’
(
References
omitted.)
[7]
Desert Oil asserts that it has a
prima
facie
right on the basis that the agreement with the Old OP company affords
it the exclusive right to supply fuel at the OP Filling Station,
for a period of 20 years, with the agreement
expiring in 2036. It furthermore contends that the agreement was
revived after the
caretaking periods came to an end.
In addition, Desert Oil alleges that Mr. Kesiamang is attempting to
evade the obligations of the agreement by the deregistration
of the
Old OP company and the incorporation of the New OP company.
The applicant, in the
action, will request the court to declare Mr. Kesiamang’s
conduct as an unconscionable abuse of the
separate juristic
personality of the New OP Company; and to grant consequential relief
in the form of an order that the New OP
company is deemed to be the
contracting party to the agreement; and that the New OP Company is
bound by and obliged to comply with
the provisions of the agreement.
[8]
The respondents rely on section 2A(6) of the Petroleum Products Act
120 of 1977 (“the
PPA”) in support of its argument that
Desert Oil has not established the requirement of a
prima facie
right. According to the respondents, Desert Oil knew that the Old
OP company was not in possession of a licence, and as such, it
transgressed the provisions of section 2A(6) of the PPA that states:
-
‘
A
licensed manufacturer shall only sell petroleum products to a
licenced wholesaler or a licensed retailer, or both, except for
export purposes.’
[9]
It is common cause that the Old OP company does not have a site or
retail licence.
[10]
The respondents argue that Desert Oil must have been aware of the
correct factual position, and
as such knew that it was selling fuel
to an unlicenced business, as: -
10.1
The retail licence, issued to Mr OP Kesiamang and not the Old OP
company, was always at display at
the site;
10.2
The internal email sent from Desert Oil’s general manager to
Desert Oil’s operations manager
on 6 March 2018 in which email
Ms. K Mallick writes: -
‘
The
current caretaker at OP Filling Station has applied for retail
license and has been advised by the DOE that the site already
has a
retail licence that requires renewal fees and re-print fees.
Please
could you kindly request from the previous operator.’
10.3
Despite the email dated 19 March 2018 from Desert Oil’s
operations manager to Mr Kesiamang in
which a copy of the retail
licence is requested, Desert Oil never pursued the matter further.
[11]
Desert Oil, however, avers that they laboured under the impression,
albeit incorrectly, that
the business was operating with a valid
licence in view of: -
11.1
The fact that Mr Kesiamang does not deny that when the Old OP company
entered into the agreement with
Desert Oil, he had represented to
Desert Oil that the Old OP company had the necessary site and retail
licences required to operate
the business; and
11.2
The content of the two emails dated 06 and 19 March 2018.
[12]
To my mind, the respondents’ reliance on the two emails is
misconceived because neither
of the two emails confirms that Desert
Oil was aware of the correct factual position. A request is merely
made for a copy of the
licence.
The
respondents’ answer that Desert Oil knowingly supplied fuel to
the Old OP company without a licence is disingenuous as
the
information about the status of the licence must have been within Mr
Kesiamang’s knowledge. I am equally unsatisfied
with Desert
Oil’s conduct as it was not diligent in timeously obtaining the
correct information.
[13]
Mr JJF Hefer SC, on behalf of the respondents, referred me to the
judgment in
Schierhout
v Minister of Justice (“Schierhout”)
[4]
in
support of his argument that if the interim relief is granted, the
Court will protect an illegal right, which is impermissible.
It was
held in
Schierhout
that:
-
‘
It
is a fundamental principle of our law that a thing doen contrary to
the direct prohibition of the law is void and of no effect….
So what was done contrary to the prohibition of law is not only of no
effect, but must be regarded as never having been doen –
and
that whether the lawgiver has expressly so decreed or not, the mere
prohibition operated to nullify the act.’
[13]
Mr. Hefer SC also referred me to
Walsun
Motordienste CC v Combrink N.O. and Others
[5]
where the Full Bench held: -
‘
[16]
The plaintiff, based on the absence of such a license, decided to
cancel the agreement, and rightly
so in my view. Not only have the
parties agreed that defendant would obtain the necessary license, but
the Act compels the defendant
to do so. At the time of the hearing of
this appeal defendant was still in default in respect of this
particular obligation and
was still in occupancy of the premises,
presumably retailing fuel in contravention of the provisions of the
Act. In the absence
of an obtained license, defendant may not conduct
business on the premises. The court may not be a party to
transgressing the Act.
This is exactly what the defendant asks from
court, namely to keep the agreement in place. For the same reasons I
cannot find that
defendant had extended the lease agreement as per
clause 11.2. The lease agreement in any event lapsed by effluxion of
time on
31 August 2019.’
[14]
The respondents’ arguments are, however, not vindicated if
regard is had to the following:
-
14.1
Section 2A(2)(b) of the PPA grants the Controller of petroleum
products the discretion to allow a person
to continue with its
activities, which may be in contravention of section 2A(1), pending
an application and the issue of a licence
if the cessation of such
activity is likely to lead to a material interruption in the supply
of petroleum products;
14.2
Section 2A(3) of the PPA provides that if a person engages in an
activity in contravention of the licence,
the Controller must give
written notice to that person to comply with the licence, and if
applicable, to rectify any state of affairs
resulting from the
contravention;
14.3
The caretaker applied for a retail licence and was informed in March
2018 that the site already had
a retail licence; and
14.4
Mr. Kesiamang, on 15 July 2024, addressed an email to Desert Oil’s
director in which letter he
confirms that that the DMRE agreed that
the filling station may be opened in the interim and that it will be
operated by him as
a caretaker under the existing licence, pending
the approval of the new licence. Furthermore, Mr. Kesiamang confirms
that the site
licence in favour of the first respondent had already
been approved by the DMRE and he has applied for new licence.
[15]
In view of the above, I accordingly find that the granting of an
interim order will not countenance
an illegal act or enforce an
illegal agreement.
[16]
The second issue that requires consideration is whether Desert Oil
will be successful in proving
that Mr Kesiamang’s conduct is an
unconscionable abuse for the purpose of
section 20(9)
of the
Companies Act.
>
[17]
Section 20(9)
of the
Companies Act, in
part, reads: -
‘
If,
on application by an interested person…., a court finds that
the incorporation of the company, any use of the company,
or any act
by or on behalf of the company, constitutes an unconscionable abuse
of the juristic personality of the company as a
separate entity, the
court may –
(a)
declare
the company to be deemed not to be a juristic person in respect of
any right, obligation or liability of the company…
or of
another person specified in the declaration; and
(b)
make
any further order that the court considers appropriate to give effect
to a declaration contemplated in paragraph (a)’
[18]
The Supreme Court of Appeal in
Butcher
Shop and Grill CC v Trustees for the Time Being of the Bymyam
Trust
[6]
confirmed that
section 20(9)
of the
Companies Act has
not abolished
or replaced the common law in relation to the piercing of the
corporate veil, but that it supplements the common
law and broadens
its reach. In
City
Capital SA Property Holdings Ltd v Chavonnes Badenhorst St Clair
Coopers and Others
[7]
the
Supreme Court held as follows with regard to the application of
section 20(9)
of the
Companies Act
: -
‘
Section 20(9)
of the 2008 Act provides a statutory basis for piercing the corporate
veil. On its plain wording, s 20(9) permits
a court to disregard the
separate juristic personality of the company where its incorporation,
use or an act performed by or on
its behalf ‘constitutes an
unconscionable abuse of the juristic personality of the company as a
separate entity’. The
term ‘unconscionable abuse’
is not defined in the 2008 Act and must therefore be given its
ordinary meaning.
The meaning of
‘unconscionable’ in the Oxford English Dictionary
includes, ‘Showing no regard for conscience .
. . .
Unreasonably excessive . . . . egregious, blatant . . . .
unscrupulous.’ It is in my view undesirable to attempt to
lay
down any
definition of “unconscionable
abuse”. It suffices to say that the unconscionable abuse of the
juristic personality of
a company within the meaning of s 20(9) of
the 2008 Act includes the use of, or an act by, a company to commit
fraud; or for a
dishonest or improper purpose; or where company is
used as a device or facade to conceal the true facts.’
[19]
Desert Oil’s grounds for invoking
section 20(9)
of the
Companies Act are
the following:-
19.1
The registration of the New OP company on 27 July 2022, with Mr
Kesiamang as its sole director;
19.2
The resignation of all the directors of the
Old OP company, save for one;
19.3
Allowing or orchestrating the deregistration of the Old OP company by
deliberately failing to pay the
annual return amounts required to
maintain its registration;
19.4
Submitting applications for site and retail licences for business in
the name of the New OP Company;
and
19.5
Sending out the RFP on 21 July 2024 soliciting offers from petroleum
wholesales to enter into an agreement
with the New OP Company in
respect of the business, which would thwart Desert Oil’s rights
under the agreement.
[20]
According to Ms DM Davis SC, on behalf of Desert Oil, a dishonest
motivation may be inferred
from the above grounds, which is
indicative of a stratagem
by
Mr. Kesiamang
aimed at evading the
contractual obligations of the Old OP company.
[21]
I deal with the grounds stipulated above in succession.
The registration the
New OP company on 27 July 2022, with Mr Kesiamang as its sole
director: -
[22]
Ms. Davis SC submitted that a dishonest motivation may be inferred
if
the timing of the incorporation of the New OP company is viewed
against the fact that the two successive amendments to the agreement
providing for a caretaker franchisee which temporarily
suspended the rights and obligations of Desert Oil and the Old OP
Company. These rights and obligations were revived on the expiration
of the caretaking periods. Desert Oil and the Old OP Company
entered
into negotiations with regard to the possibility of entering into a
head lease agreement in respect of the site when the
caretaking
periods ended. On 20 July 2022 STBB, Desert Oil’s erstwhile
attorney addressed a letter to the Old OP Company’s
attorney,
placing on record the terms and conditions on which Desert Oil would
be prepared to enter into a head lease in respect
of the business;
and in which it also reminded the Old OP Company that it was bound to
acquire fuel exclusively from Desert Oil
until 31 August 2036. No
response to the letter was received; and these allegations are not
denied by the respondents. The respondents,
however, admit that as at
July 2022, the Old OP Company was desirous of entering into a head
lease; and that it was engaging in
discussions with other
wholesalers.
[23]
The respondents’ vague response that the New OP Company was
suddenly established on 27
July 2022, within a matter of days after
receipt of the STBB letter, namely that it was done for “
commercial
purposes”
is simply not adequate and tips the scale in
favour of Desert Oil.
The resignation of all
the directors of the Old OP company, save for one: -
[24]
It is common cause that only Mrs. AM Kesiamang is an active director
of the Old OP company. The
CIPC printout does not reflect the
resignation dates of Messrs Kesiamang and MJ Kesiamang. Ms. Davis SC
contended that the inference
must be drawn that the resignation dates
were conveniently left blank to conceal the fact that the
resignations had occurred at
the same time as the registration of the
New OP company. In response, Mr Kesiamang only states that ‘The
reason why the directors
resigned from the old OP Filling Station
(Pty) Ltd, was merely because each of them was no longer involved in
the business and
had other business obligations.’
[25]
I agree with Ms Davis SC that Mr. Kesiamang’s response does not
withstand scrutiny because:
-
25.1
It is not disputed that Mr. Kesiamang attended an online meeting with
Desert Oil on 24 August 2022,
without Desert Oil being informed of
the registration of the New OP company; and
25.2
Mr Kesiamang’s response does not explain why he resigned merely
to be appointed as the only director
of the New OP company.
Allowing or
orchestrating the deregistration of the Old OP company: -
[26]
The respondents do not dispute that the Old OP company was
deregistered for annual return non-compliance;
and that it could have
been reinstated by simply paying the outstanding annual returns. In
response to the statement that the Old
OP company was deliberately
allowed to be deregistered in order to evade its obligations in terms
of the agreement, Mr Kesiamang
baldly states that ‘OP Filling
Station (Pty) Ltd was deregistered because of financial constraints.’
This response
is terse and non-sensical as it does not explain how
the incorporation of the New OP company would resolve the Old OP
company’s
financial concerns.
Submitting
applications for site and retail licences for business in the name of
the New OP Company: -
[27]
According to Desert Oil, this Court should draw an adverse inference
from the fact that Mr. Kesiamang
applied for site and retail licences
in the name of the New OP company. As no explanation is proffered why
it was necessary to
apply for licences in the New OP company’s
name instead of in the name of the Old OP company, I am swayed to
reach the conclusion
that the respondents may be desirous of evading
the obligations of the agreement.
The sending out of the
RFP on 21 July 2024: -
[28]
I am inclined to regard the sending out of the RFP on 21 July 2024 as
indicative of conduct that
may be proven to be unconscionable abuse
as no other inference can be drawn as that the respondents are intent
to secure a benefit
by entering into an agreement with another
wholesaler. That much is clear from the wording of the RFP.
[29]
I am thus persuaded that Desert Oil
has
furnished proof which, if uncontradicted at trial, would entitle it
to the final relief
that the
respondents’ conduct could amount to an unconscionable abuse of
the juristic personality of the first respondent
as a separate
entity, as contemplated in
section 20(9)
of the
Companies Act.
The
respondents’
version does not cast serious doubt on Desert Oil’s case.
[30]
As a result, Desert Oil has satisfied the requirement that it has a
clear right to the relief
it seeks.
Irreparable harm: -
[31]
The second requirement is proof that Desert Oil has a reasonable
apprehension of harm if the
relief is not granted.
In
the matter of
Minister
of Law and Order Bophuthatswana v Committee of the Church Summit
[8]
the Court held that
the
word ‘injury’ must be understood in the wide sense to
include any prejudice suffered by an applicant as a result
of the
infringement of his rights and that the injury does not have to be
capable of pecuniary evaluation. It is accordingly not
necessary for
an applicant to establish on a balance of probabilities that the
injury will occur, he must simply establish on the
balance of
probabilities that there are good grounds for a reasonable
apprehension that his rights will be detrimentally affected.
[32]
According to Desert Oil, it would suffer irreparable harm if the
relief is not granted as a new
agreement between the New OP company
and Total (or any other oil major) will defeat Desert Oil’s
rights under the agreement.
Furthermore, if the status quo is not
preserved, it would be too late to turn back the clock as a new
wholesaler would immediately
commence to establish itself on the
site, which Desert Oil would not be able to de-establish, even if it
is successful in the action;
and that Desert Oil would have to be
content with a claim for damages. Desert Oil also avers that the
continued operation of the
agreement is important for reasons other
than the profit it generates. In amplification, Desert Oil explains
that it requires the
regular and ongoing sale of fuel to the
respondents to enable it to comply with its volume targets as laid
down by Astron, failing
which, Astron would be entitled to cancel the
branded marketer agreement, which would ultimately eliminate the
entire substructure
of Desert Oil’s business.
[33]
The respondents do not contest Desert Oil’s assertions, save to
insinuate that a damages
claim would be adequate redress.
[34]
The Constitutional Court in
City
of Tshwane v Afriforum
[9]
confirmed that: -
“
Irreparable”
implies that the effects or consequences cannot be reversed or
undone. Irreparable therefore highlights the irreversibility
or
permanency of the injury or harm. That would mean that a favourable
outcome by the court reviewing allegedly objectionable conduct
cannot
make an order that would effectively undo the harm that would ensue
should the interim order not be granted.’
[35]
Desert Oil convincingly satisfies the second requirement that it
would suffer irreparable harm
if the relief is not granted as an
order in the action would not undo Desert Oil’s harm.
Balance of
convenience: -
[36]
Desert Oil relies on the same arguments raised in respect of
irreparable harm to prove that the
balance of convenience favours the
granting of relief. The respondents merely counter that Desert Oil
will not be successful in
the action. This statement does not assist
the respondents in disturbing the probabilities in Desert Oil’s
favour.
No alternative remedy:
-
[37]
In the final instance, Desert Oil must show that it is has no other
adequate ordinary remedy.
This requirement is closely linked with
“irreparable harm” for if the injury envisaged would be
irreparable if allowed
to continue, an interdict would be the only
remedy. On the other hand, if there is some satisfactory alternative
remedy, the injury
cannot be described as irreparable.
[10]
[38]
Desert Oil contends that it has no other remedy for the preservation
and protection of its contractual
rights under the agreement in terms
of
section 20(9)
of the
Companies Act; and
in particular, that the
remedy of damages would result in Desert Oil to part with its
contractual rights, including the ability
to perform in terms of its
branded marketer agreement with Astron.
[39]
The respondents suggest that Desert Oil should negotiate ‘a
better deal with the First
Respondent’, alternatively that it
should submit a proposal in response to the RFP. These arguments are
flawed as commercial
negotiations does not equate to a legal remedy.
I am also not persuaded that damages would be an appropriate remedy.
[40]
Desert Oil therefore meets the requirements for the granting of an
interim interdict.
Costs: -
[42]
The
convention is that costs are awarded against the unsuccessful party.
Despite requesting a cost order against opposing parties
in its
notice of motion, Ms. Davis SC proposed that the costs of this
application should be determined in the action. I agree that
such an
order would be just and fair in the circumstances.
Wherefore the following
order is made: -
1.
Pending the final determination of an action to be instituted by the
applicant
against the first and second respondents claiming
declaratory and consequential relief in terms of section 20(9) of the
Companies
Act 71 of 2008 (“the action”): -
1.1
The first and second respondents are interdicted and restrained from:
-
1.1.1
entering into a fuel supply agreement with the third respondent
and/or with any
person other than the applicant;
1.1.2
implementing any fuel supply agreement which may have already been
concluded with
the third respondent or with any other party;
1.1.3
in any way interfering with, hindering or preventing the ongoing
supply of fuel
by the applicant to the business conducted in
Bathlaros under the name “OP’s Filling Station” or
OP Filling Station
(“the business”), including but not
limited to, ceasing the operations of the business;
1.2
The first and second respondents shall do all things necessary to
finalise the application
for, and the issue of, a valid fuel retail
licence in the name of the first respondent for the operation of the
business;
1.3
The first and the second respondents shall comply with all the
provisions of the supply
and operating agreement concluded between
the applicant and OP’s Filling Station (Pty) Ltd on 30
September 2016;
1.4
The first and second respondents shall not purchase, and/or permit
the purchase, of fuel
for sale in the business from any supplier
other than the applicant;
2.
Summons in the main action shall be issued and served within 30
calendar days
from the date of this order, or such longer period as
the parties may agree to in writing or the Court may order on
application,
on good cause shown, failing which, the orders as set
out in paragraphs 1.1 to 1.4 shall lapse; and
3.
The costs of this application shall stand over for determination in
the main
action.
STANTON, A
JUDGE, HIGH COURT,
NORTHERN CAPE DIVISION
On
behalf of the applicant:
Adv.
DM Davis SC
On
instruction of Korbers Inc.
Care
of Haarhoffs Inc.
On
behalf of the first and second respondents:
Adv
JJF Hefer SC
On
instruction of PGMO Atorneys
[1]
Setlogelo
v Setlogelo
1914 AD 221
at 227.
[2]
Webster
v Mitchell
1948 (1) SA 1186
(W) at 1188.
[3]
2023
(4) SA 325
(CC) at para [64] to [68].
[4]
1926
AD 109.
[5]
(
A63/2022)
[2023] ZAFSHC 129
(14 April 2023).
[6]
2023
(5) SA 68
(SCA) paras 38 – 40 and 60.
[7]
2018
(4) SA 71
(SCA) at paras 26 -27.
[8]
1994
(3) SA 89(B)
at 98H-I and 99A-B.
[9]
2016
(6) SA 279
(CC) para 59.
[10]
Erasmus:
Superior Court Practice Vol 2 at D6-21.