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CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT 196/21
In the matter between:
RISSIK STREET ONE STOP CC
t/a RISSIK STREET ENGEN First Applicant
WILLEM JOHANNES KNOESEN Second Applicant
and
ENGEN PETROLEUM LIMITED Respondent
Neutral citation: Rissik Street One Stop CC t/a Rissik Street Engen and Another v
Engen Petroleum Ltd [2023] ZACC 4.
Coram: Zondo CJ, Baqwa AJ, Kollapen J, Madlanga J, Majiedt J,
Mbatha AJ, Mhlantla J, Rogers J and Tshiqi J
Judgment: Kollapen J (unanimous)
Heard on: 4 August 2022
Decided on: 1 February 2023
Summary: Petroleum Products Act 120 of 1977 — section 12B —stay of
eviction proceedings — pending outcome of section 12B
arbitration — continued occupation after the ex piry of an
operating lease permissible — purpose of the Act —
transformation of the petroleum industry — specific relief sought
need not be specified in request to Controller of Petroleum
Products
KOLLAPEN J
ORDER
On appeal from the Supreme Court of Appeal (hearing an appeal from the High Court
of South Africa, Limpopo Division, Polokwane) the following order is made:
1. Leave to appeal is granted.
2. The appeal is upheld.
3. The order of the Supreme Court of Appeal is set aside and replaced with
the following:
“a) Subject to (b) below the appeal is dismissed with costs.
b) The stay granted in paragraph 23.1 of the High Court’s order will
endure pending the final outcome of any process ar ising from the
applicants’ request to the Controller of Petroleum Products
(Controller) in terms of section 12B of the Petroleum Products
Act 120 of 1977.
c) The respondent is interdicted from taking any steps that will
adversely affect the operations of the first applicant pending the
final outcome of the process referred to the Controller.”
4. The respondent is to pay the costs of the applicants in this Court ,
including the cost of two counsel.
5. The Registrar of this Court is directed to forward a copy of this
judgment to the Minister of Mineral Res ources and Energy, the
Director-General of the Department of Miner al Resources and Energy
and the Controller and to draw their attention to [85] to [88] of the
judgment.
JUDGMENT
KOLLAPEN J
KOLLAPEN J (Zondo CJ, Baqwa AJ, Madlanga J, Majiedt J, Mbatha AJ, Mhlantla J,
Rogers J and Tshiqi J concurring):
Introduction
[1] Section 12B of the Petroleum Products Act 1 (PPA) was introduced in
recognition of the deep inequality within the retail fuel industry and with the objective
of transforming that industry. It introduced a normative framework of fairness and
reasonableness that would apply to all contracts in the i ndustry. It also created an
arbitral mechanism to ensure that unfair or unreasonable contractual practi ces were
capable of being identified and corrected. This case present s compelling evidence of
the contours of that inequality while at the same time representing a searching test of
the scope and efficacy of the legislative promise that section 12B heralded.
[2] In Business Zone CC,2 this Court expressed the importance of transforming the
petroleum industry to ensure that unequal bargaining power in the industry was
addressed for those doing business in that industry, as well as empowering historically
disadvantaged South Africans in the petroleum and liquid fuels industry. Mhlantla J
explained:
“One of the purposes of the [Petroleum Products] Amendment Act is set out in its
preamble and is, amongst others, ‘to promote transformation of the South African
petroleum and liquid fuels industry’. Schedule 1 of the Amendment Act goes on to
introduce an industry charter ‘on empowering historically disadvantaged
South Africans in the petroleum and liquid fuels industry’. Unequal bargaining
power in the petroleum industry is pervasive even in more developed countries such
1 120 of 1977.
2 Business Zone 1010 CC t/a Emmarentia Convenience Centre v Engen Petroleum Ltd [2017] ZACC 2; 2017 (6)
BCLR 773 (CC).
KOLLAPEN J
as our common law comparator, Engl and, whose history of inequality pales in
comparison with our own.”3
Parties
[3] The first applicant, Rissik Street One Stop CC, is a retailer of petroleum
products and has since 1998 leased premises from Engen in terms of an operating
lease agreement (operating lease). The second applican t is Mr Willem Johannes
Knoesen, the sole member of the first applicant (collectively Rissik Street). The
respondent, Engen Petroleum Limited (Engen), carries on business as a manufacturer,
marketer and bulk distributor of petroleum, diesel and chemical products. It is t he
lessee of Portions 1, 3 and the Remainder of Erf 3 […], Pietersburg Township
(premises) in terms of a notarial deed of lease (notarial lease) it concluded with the
owner of the premises. Engen sublet the premises to Rissik Street.
Factual background
[4] The operating lease that was in place at the time of the dispute between the
parties was concluded on 30 March 2015. It commenced on 1 April 2015 and was
scheduled to end on 30 June 2018.
[5] In terms of the operating lease, Engen was obliged to furnish Rissik Street with
at least 12 months’ notice if it intended not to renew the operating lease. The
operating lease recognised Rissik Street’s ri ght to sell the business in the event of the
non-renewal of the lease, in which event Rissik Street would have a period of
12 months prior to the termination of the lease within which to sell the business. The
operating lease provided that Engen could not unreasonably withhold its consent to
any proposed sale. This was presumably in recognition that Rissik Street had an
“entrenched value” in the business , which it was entitled to realise in the event of the
termination of the operating lease.
3 Id at para 47. In the context of English law, see the cases of Alec Lobb (Garages) Ltd v Total Oil GB Ltd
[1985] 1 All ER 303 (CA) and Esso Petroleum Co Ltd v Harper's Garage (Stourport ) Ltd [1967] 1 All ER 699
(HL).
KOLLAPEN J
[6] Prior to the termination of the notarial lease a nd the operating lease , t he
landowner required a R3 million payment from Engen as a condition to renew the
notarial lease. Engen agreed to pay the R3 million and the notarial lease was extended
for 20 years. Engen in turn sought to recover the R3 million paid to the landowner
from Rissik Street by requesting it to pay the R3 million as a condition f or renewing
the operating lease. The parties were unable to reach agr eement in relation to the
R3 million payment, resulting in the operating lease not being renewed.
[7] When the parties were unable to reach agreement on the renewal of the
operating lease, Engen gave notice of termination on 2 October 2017 and advised
Rissik Street that the operating lease would terminate on 31 October 2018. This was
to accommodate the 12 -month period within which Rissik Street had the right to sell,
as provided for in the operating lease. Engen further advised Rissik Street of their
right to seek a purchaser for the business.
[8] On 25 May 2018, Rissik Street introduced a potential purchaser to Engen and
sought Engen’s approval. 4 Engen refused to give its approval . W hen Rissik Street
requested reasons for the refusal , Engen, purporting to rely on clause 10.1 of
Schedule 3 to the operating lease , took the position that its refusal constituted an
“absolute and unfettered ” discretion as provided for in the operating lease and that it
need not furnish Rissik Street with any reasons for the decision . This was on
22 June 2018.
[9] Engen’s letter in response to Rissik Street’s request to approve the sale reads:
“1 We refer to your correspondence of even date.
2 As you are no doubt aware, in terms of clause 10.1 of Schedule 3 to the
Agreement of Lease and Operation of Service Station between the parties:
4 Rissik Street says it introduced two purchasers in May 2018, but Engen claims there was only one.
KOLLAPEN J
‘The exercise of any discretion by [Engen] contemplated by
the provision s of this Schedule 3 shall be absolute and
unfettered, and [Engen] need not furnish the [Rissik Street]
with its reasons for any such exercise.’
3 Our rights remain strictly reserved.”
Rissik Street’s request for arbitration
[10] On 25 July 2018, Rissik Street submitted a request for arbitration to
the Controller of Petroleum Products (Controller), in terms of section 12B of the PPA
alleging an unfair or unreasonable contractual practi ce on the part of Engen .
Rissik Street’s owner, Mr Knoesen, complained that, among other things, he had
introduced two potential purchasers with the requisite supporting documents in May
2018, but Engen had refused to sel l to either of them and refused to provide reason s.
This left Rissik Street unable to exercise its right in terms of the operating lease. If it
did not know why particular buyers were not approved, it was unable to remedy the
defect or determine whether Engen’s consent had been unreasonably withheld.
Mr Knoesen complained:
“3.3 I am now faced with the situation at the end of the franchise period where my
business will be terminated on 31 October 2018.
3.4 Although I have a clear contractual right to sell the business and to the
proceeds thereof, Engen has, without providing any r easons thereto, refused
to authorise the purchase by any party.”
[11] Rissik Street concluded its request to the Controller by asserting that it wished
to sell the business and to be afforded the opportunity to do so without being
frustrated by Engen at every turn.
[12] On 7 September 2018, Rissik Street wrote an email to the Controller enquiring
as to when they could expect a response to their request for arbitration submitted on
26 July 2018. No response was received . On 17 October 2018, Rissik Street sent a
further email to the Controller requesting an urgent update regarding their section 12B
KOLLAPEN J
arbitration request. This was followed by further emails to the Controller on
28 February 2019 and 5 March 2019, neither of which elicited any response.
[13] On 17 January 2019 , and while waiting for the decision of the Controller,
Rissik Street introduced a nother potential purchaser of the business to Engen. The
proposed purchaser was willing to pay both the purchase pric e and the R3 million
premium. Engen adopted the stance that it did not need to consider the application as
the operating lease between itself and Rissik Street had terminated by effluxion of
time on 31 October 2018.
[14] On 22 January 2019, Engen gave Ri ssik Street written notice to vacate the
premises. Rissik Street refused to vacate the premises and in March 2019, Engen
instituted eviction proceedings against Rissik Street in the High Court of South Africa,
Limpopo Division, Polokwane.
[15] Rissik Street opposed the eviction a pplication, filed an opposing affidavit and
brought a counter-application for the proceedings to be stayed pending the decision of
the Controller. In July 2019, the Controller acti ng in terms of section 12B , referred
the matter to arbitration. The specific issues referred to arbitration were:
“5.1. By requesting an amount of R3 million for ‘goodwill’ in order to renew their
lease agreement. [Rissik Street] had never been required to pay such an
amount previously when renewing the lease, as the Franchisee of the
Rissik Street Engen for the past twenty years, the goodwill generated towards
[Rissik Street] would have been due to the action of the [Rissik Street] and its
employees not Engen;
5.2. By not engaging with [Rissik Street] in trying to resolve the matter and
serving [Rissik Street] with a notice of non -renewal in terms of 44.2
Schedule 2 of the Operating Lease no reasons were provided; and
5.3. By refusing to authorise sal e to either potential purchaser provided for by
[Rissik Street] with no reasons thereof. As reasons for refusal were not
provided [Rissik Street] is unable to remedy that defect or sourcing further
interested buyers.”
KOLLAPEN J
[16] At the time of the hearing of b oth the main application and the
counter-application in the High Court in December 2019 , the Controller had referred
the practices complained of by Rissik Street to arbitration.
[17] Engen subsequently lodged an appeal with the Minister of Mineral Resources
and Energy against the Controller’s decision to refer the complaints to arbitration.
This appeal still has to be decided.
Litigation history
High Court
[18] Engen argued that Rissik Street was in substance not oppo sing the eviction
application and had no desire to remain in occupation of the premises. Instead,
Rissik Street laboured under the incorrect impression that, because they had the right
to sell the business , they were entitled to remain in occupation while they tried to do
so. Engen’s stance was that it was under no obligation, contractually or otherwise, to
allow for the unlawful occupation of the premises to continue, in order to provide
Rissik Street with a further opportunity to sell the business. It argued that, as the
operating lease had terminated , Rissik Street’s continued occupation o f the premises
was unlawful.5
[19] Rissik Street sought that the eviction proceedings in the High Court be stayed
pending a decision by the Controller on their request for arbitration, which stay, they
argued, should extend until the conclusion of the arbitr ation. They contended that
section 12B of the PPA was introduced to address the imbalances in the relationship
between retailers and wholesalers in the petroleum industry, and that an arbitrator was
empowered to make a corrective award relating to the dispute. That corrective award
5 Engen Petroleum Ltd v Rissik Street One Stop CC t/a Rissik Street Engen , unreporte d judgment of the
High Court of South Africa Limpopo Division, Polokwane, Case No 1583/2018 (12 February 2020) (High Court
judgment) at para 8.
KOLLAPEN J
could include an award allowing Rissik Street to remain in occupation of the premises
on the same terms and conditions as during the period it was entitled to sell the
business.
[20] The following questions were before the High Court:
(a) Whether to stay the eviction proceedings, pending a d etermination by
the Controller of Rissik Street’s referral of a dispute to arbitration in
terms of section 12B of the PPA.
(b) If the proceedings were stayed, whether to interdict Engen from taking
steps that would adversely affect the operations of Rissik Street, pending
the outcome of the arbitration in terms of the PPA.
(c) In the event that Rissik Street’s counter-application was refused,
whether an order for eviction from the premises should be granted.
[21] In its judgment , the High Court explained that during the notice period, the
operating lease remained valid. During this time it was open to the parties , if either
was of the view that an unfair or unreasonable contractual practice ha d been
committed by the other party , to request the C ontroller to submit the matter for
arbitration.6 This, the High Court reasoned, is what Rissik Street did.
[22] The High Court refused to grant the eviction order pending the finalisation of
the arbitration proceedings. The Court premised its conclusion on the following:
(a) It defeats the purpose and spirit of section 12B of the PPA, which
introduces arbitration.7
(b) In terms of section 12B(2) of the PPA, the parties determine the rules of
arbitration and are at liberty to include any dispute, which in the case at
hand, may have included eviction proceedings.8
6 Id at para 13.
7 Id at para 20.
8 Id.
KOLLAPEN J
(c) As soon as Rissik Street were evicted, their sources of income would be
diminished, which would place them in a weaker position to finance the
pending litigation.9
(d) Business Zone CC 10 provides that arbitration procedures suspend the
institution of court litigation.11
[23] The High Court explained that an arbitrator acting in terms of section 12B(4)(a)
has the power to make such award as is deemed necessary to correct an unfair or
unreasonable contrac tual practice, and that the terms of reference of the arbitration
had not yet been determined. It said that Rissik Street were still at liberty to seek
reinstatement of the operating lease and the arbitrator w as empowered to make such
an award.12
[24] It relied on Business Zone CC in concluding that the arbitrator’s power to make
an award as it deems necessary to correct an unfair or unreasonable contractual
practice included the reinstatement of the operating lease.13
[25] The High Court found that as the process of referring the matter to arbitration
had already been initiated, it should be given an opportunity to run its course. It said
that it was in the interests of justice that the eviction proceedings be stayed, pending
the outcome of the referral by Rissik Street to the Controller for a determination as to
whether to submit the matter to arbitration.14 It also inte rdicted Engen from taking
any steps that would adversely affect the operations of Rissik Street, pending the final
9 Id.
10 Business Zone CC above n 2.
11 High Court judgment above n 5 at para 20.
12 Id at para 21.
13 Id.
14 Id at para 22.
KOLLAPEN J
outcome of the process referred to the Controller.15 The High Court made the
following order:
“23.1. That the current proce edings are stayed pending the decision by the
Controller on referral by the respondents in terms [of] section 12B of the
PPA.
23.2. The applicant is interdicted from taking any steps that will adversely affect
the operations of the respondents pending the outcome of the process referred
to the Controller.
23.3. The applicant to pay the respondents costs on a party and party scale.”
[26] It is not clear why the order staying the eviction proceedings was made pending
the decision of the Controller when, at the time the order was made, the Controller had
already taken the decision to refer the matter to arbitration. The interdictory reli ef
granted by the High Court , however, provided that the relief granted was to endure
until the completion of the process determined by the Controller. If the decision of
the Controller was to refer the matter to arbitration, then Engen was interdicted fr om
taking steps that would adversely affect Rissik Street’s operations until the final
outcome of the arbitration process. The two componen ts of the order are only
compatible if the stay of eviction order is interpreted to mean that it endures until the
decision of the Controller and the outcome of that process . This would then be
consistent with the interdict, which was to endure until the conclusion of the process
determined by the Controller , which could extend until the end of the arbitrat ion
process.
[27] To read the first part of the order literally and restrictively would create a
disjuncture between the two components of the order and render them incompatible
with each other. If regard is had to the tenor of the judgment, the High Court had in
mind relief that would ensure that the process of arbitration be given the opportunity
15 Id at para 23.
KOLLAPEN J
to run its course. 16 It must follow that the first part of the order must be interpreted
both in the context of the judgment as a whole as wel l as with the purpose the order
was intended to achieve.17
Supreme Court of Appeal
[28] Engen was granted leave to appeal to the Supreme Court of Appeal . On
appeal, Engen contended that the High Court had erred in finding that Rissik Street
would still be at liberty to seek reinstatement of the operating lease at arbitration and
that the eviction of Rissik Street prior to the arbitration would interfere with the
powers of the arbitrator. Engen submitted that Rissik Street did not comp lain to the
Controller in terms of section 12B of the PPA that the termination of the operating
lease was an unfair or unreasonable contractual practice.18
[29] Engen also contended that the High Court had incorrectly interpreted
this Court’s judgment in Business Zone CC as authority for the proposition that a
referral to arbitr ation in terms of section 12B automatically suspended the eviction
proceedings.19
[30] Rissik Street contended on appeal that in terms of the operating lease, they had
a right to s ell the business once Engen had given notice that it would not renew the
operating lease. They argued that, despite the termination of the lease agreement, they
were entitled to remain in occupation of the premises and continue to trade in order to
enable them to sell the business as a going concern.20
16 Id at para 22.
17 University of Johannesburg v Auckland Park Theological Seminary [2021] ZACC 13; 2021 (6) SA 1 (CC);
2021 (8) BCLR 807 (CC) at paras 66 -9. See also Eke v Parsons [2015] ZACC 30; 2016 (3) SA 37 (CC) ; 2015
(11) BCLR 1319 (CC) at para 29.
18 Engen Petroleum Ltd v Rissik Street One Stop CC t/a Rissik Street Engen and Another, unreported judgment
of the Supreme Court of Appeal, Case No 209/2020 (26 May 2021) at para 25.
19 Id at para 27.
20 Id at para 31.
KOLLAPEN J
[31] They said that Engen could not unreasonably withhold i ts consent to any such
proposed sale and that Engen’s conduct had frustrated Rissik Street’s right to sell. It
was that conduct, argued Rissik Street, which the arbitrator had to deal with.
[32] The Supreme Court of Appeal upheld the appeal. It found that Rissik Street
did not, in their request for a referral to arbitration , contend that the non -renewal of
the operating lease constituted an unfair or unreasonable contractual practice. As a
result, the notice of referral issued by the Controller did not include the non -renewal
of the operating lease as one of the issues to be determined by the arbitrator to be
appointed. The arbitrator could not decide on the non -renewal of the operating lease,
as this was not a matter referred to arbitration.21 On this argument there was no legal
basis for Rissik Street to remain in occupation , reasoned the S upreme Court of
Appeal.
[33] It also found that Rissik Street w ere entitled to be furnished with reasons for
Engen’s refusal to accept the offers to purchase the business . It said, however, that
this could not give rise to a right that would allow Rissik Street to continue to occupy
the premises when such right was not asserted in the request for referral to arbitration.
[34] The Supreme Court of Appeal found that it was not open to Rissik Street to
rely on their right to sell the business as a form of security against eviction and that
their right to sell the business should have been exercised during the currency of the
operating lease. If it was not, then Engen had the right to appoint a new dealer, and in
such event, Rissik Street would be entitled to negotiate with the new dealer the terms
of any take-over of stock and/or equipment, belonging to it.22
[35] It also found that the High Court had granted the stay of eviction on the basis of
the mistaken proposition that the arbitration procedure suspends the institution of
21 Id at para 32.
22 Id at para 37.
KOLLAPEN J
litigation. It said that the High Court had misdirected itself in its finding , as
Business Zone CC does not support this proposition. In its analysis of
Business Zone CC, the Supreme Court of Appeal explained:
“The Constitutional Court’s statement in paragraph 58 of the judgment that the
arbitration suspends the institution of court litigation is qua lified in footnote 33 in
which it is stated that the suspension will depend on the terms of the contract. Where
the contract has ended and no complaint is referred to arbitration to seek its extension,
the effect of the stay granted by the [High Court] is to grant a remedy in the interim
that cannot be obtained by way of final relief in the arbitration.”23
It found that a stay on this basis was not a competent exercise of the High Court’s
power.
[36] The Supreme Court of Appeal concluded that the High Court’s exercise of its
discretion to grant the stay of eviction proceedings was influenced by incorrect
principles, entitling it to interfere by setting aside the order made by the High Court.24
It upheld Engen’s appeal, set aside the order of the High Court and replaced it with an
order dismissing the counter -application. Rissik Street w ere ordered to vacate the
premises within 30 days from the date of the order.25
In this Court
Rissik Street’s submissions
[37] Rissik Street contend that this Court’s jurisdiction is engaged because in
several respects the case raises arguable points of law of general public importance
which ought to be considered by this Court. They say that these issues relate to and
define the obligations of parties in the retail fuel industry, as well as the scope of the
power of an arbitrator acting in terms of section 12B of the PPA. These include:
23 Id at para 38.
24 Id at para 39.
25 Id at para 40.
KOLLAPEN J
(a) Does an arbitrator have the power to make an award to correct an
unfair or unreasonable contractual practice that would allow ongoing
occupation of the premises where the operating lease has expired and
where the occupant has sought neither an extension nor a renewal of
the lease in the request for referral to arbitration?
(b) Is it necessary that a request for a referral to arbitration made in terms
of section 12B of the PPA express ly set out the relief that the
requesting party seeks or is it sufficient for such a request to merely
allege an unfair or unreasonable contractual practice, which requires
correction?
(c) What power s does an arbitrator have to correct the conduct of a
wholesaler who unfairly frustrates the right of a retailer to sell the
business which is the subject of the operating lease?
[38] On the merits, Rissik Street submit that the Supreme Court of Appeal erred in
concluding that an arbitrator, acting in terms of section 12B of the PPA , was
precluded from considering an extension of the operating lease or further period of
occupation when the same was not the subject of the request for arbitration submitted
to the Controller. In this regard, they say that there ex ists no requirement in
section 12B of the PPA for a requesting party to specify the relief it seeks – all that is
required is the allegation of an unfair or unreasonable contractual practice.
[39] They also contend that the Supreme Court of Appeal erred in failing to have
regard to the transformative objective s of section 12B of the PPA in interpreting the
power of the arbitrator in the restrictive manner in which it did.
[40] Finally, Rissik Street contend that Engen had un reasonably frus trated their
right to sell the business in the 12 -month period provided for in the operating lease
and that this constituted an unfair or unreasonable contractual practic e. What they
seek is to be placed back in a position that will enable them to sell their business .
That will require them to retain occupation of the business during this period. They
KOLLAPEN J
argue that, if they lose occupation of the premises, the business will cease to exist as a
going concern and there will be nothing, apart from the stock and equipment, to sell.
[41] An award to correct Engen’s unfair or unreasonable practice, they say, requires
them to remain in occupation to enable them to sell the business. This, they say,
would not be an extension or a renewal of the operating lease, which they do not seek,
but simply an entitlement to occupy the premises for a time-bound period.
Engen’s submissions
[42] Engen maintains that the Supreme Court of Appeal was correct in its
conclusion that the failure by Rissik Street to identify the non-renewal or extension of
the operating lease as an unfair or unreasonable contractual practice was fatal to their
attempts to resist its eviction. It argues that if the issue of occupation is not the subject
of the referra l to arbitration, then the arbitrator has no power to make an award that
relates to the occupation of the premises after the expiration of the operating lease.
Simply put, it is Engen’s case that the arbitrator cannot determine an issue that has not
been raised in the request for referral to arbitration submitted to the Controller. As
Rissik Street had not expressly raised the issue of their continued occupation of the
premises beyond the expiry of the operating lease in their request to the Controller ,
that issue would not fall within the remit of the arbitrator.
[43] In addition, it is its contention that an arbitrator cannot award an extension of
tenure where the operating lease has expired. Engen says that having failed to sell the
business during th e period provided for in the operating lease, Rissik Street ha s no
claim to extended occupation of the premises for the purpose of further attempting to
sell the business.
[44] Engen concludes by saying that there exists no basis in law for a stay of
eviction pending an arbitration in terms of section 12B of the PPA. As the arbitrator
will not have the power to make any award that relates to occupation of the premises,
no claim for a stay is therefore triggered or justified.
KOLLAPEN J
The issues
[45] The following issues require determination:
(a) Is the jurisdiction of this Court engaged?
(b) Should leave to appeal be granted?
(c) Does the arbitrator have the remedial power in terms of
section 12B(4) of the PPA to allow a party to an agreement, to
continue in occupation of the leased premises after the expiration of
the operating lease? In particular, under circumstances where neither
a renewal nor an extension of the operating lease is sought, but where
the continued occupation may be necessary to correct an unfair or
unreasonable contractual practice?
(d) Is a party w ho submits a request for a referral to arbitration in terms
of section 12B of the PPA obliged, at the time of the request, to set
out the nature of the relief that may ultimately be sought?
(e) Can a court grant a stay of eviction proceedings pending the
determination of arbitration under section 12B of the PPA?
Jurisdiction and leave to appeal
[46] The central issue before this Court is whether the remedial power of an
arbitrator in section 12B(4)(a) may extend to allowing a party to an operating lease
which has expired , to continue in occupation of the leased premises. In particular,
when the nature of the occupation would not be in the form of a renewa l or an
extension of the lease , but where the co ntinued occupation may be necessary to
correct an unfair or unreasonable contractual practice.
[47] A further issue is whether a party who alleges an unfair or unreasonable
contractual practice is obliged to set out the relief it seeks in its request for a referral to
arbitration. Arising from that is the question of whether an arbitrator would be
KOLLAPEN J
precluded from considering such relief in any award if it was not sought as part of the
request for the referral.
[48] Both issues relate to the powers of an arbitrator and raise arguable points of law
of general public importance, which ought to be considered by this Court. The scope
and power s of an arbitrator acting in terms of section 12B is an issue aff ecting the
industry as a whole.
[49] The issue s raised are novel in the context of the evolution of section 12B of
the PPA and the interests of justice warrant determinative pronouncements in order to
bring clarity to contractual practices within the retail fuel industry. Rissik Street have
also demonstrated reasonable prospects of success . Leave to appeal should therefore
be granted.26
Legal framework
[50] Section 12B of the PPA, headed “Arbitration”, states:
“(1) The Controller of Petroleum Products may on request by a licensed retailer
alleging an unfair or unreasonable contractual practice by a licensed
wholesaler, or vice versa, require, by notice in wr iting to the parties
concerned, that the parties submit the matter to arbitration.
(2) An arbitration contemplated in subsection (1) shall be heard —
(a) by an arbitrator chosen by the parties concerned; and
(b) in accordance with the rules agreed between the parties.
(3) If the parties fail to reach an agreement regarding the arbitrator, or the
applicable rules, within 14 days of receipt of the notice contemplated in
subsection (1) —
(a) the Controller of Petroleum Products must upon notification
of such f ailure, appoint a suitable person to act as arbitrator;
and
(b) the arbitrator must determine the applicable rules.
26 S v Boesak [2000] ZACC 25; 2001 (1) SA 912 (CC); 2001 (1) BCLR 36 (CC) at para 12.
KOLLAPEN J
(4) An arbitrator contemplated in subsection (2) or (3) —
(a) shall determine whether the alleged contractual practices
concerned are unfair or unreasonable and, if so, shall make
such award as he or she deems necessary to correct such
practice; and
(b) shall determine whether the allegations giving rise to the
arbitration were frivolous or capricious and, if so, shall make
such award as he or she deems necessary to compensate any
party affected by such allegations;
(5) Any award made by an arbitrator contemplated in this section shall be final
and binding upon the parties concerned and may, at the arbitrator's discretion,
include any order as to costs to be borne by one or more of the parties
concerned.”
Operating lease
[51] The relevant provisions of the operating lease provide:
(a) Clause 22 of Schedule 2 recognises Rissik Street’s right to sell the
service station business at any time durin g the currency of the operating
lease.
(b) The procedure for the sale is regulated by Schedule 3. Clause 1.3 of that
Schedule provides:
“Should [Rissik Street ] wish to sell the Business, it may suggest a proposed
purchaser/successor to [Engen], and [Engen] will generally consider that
proposed successor as a candidate for a new operating lease of the Premises,
subject to the provisions of this Schedule 3. If the prospective successor . . .
meets all of [Engen’s] selection criteria for a Dealer at the Premises, then in
the absence of any reason to the contrary, [Engen] will generally be willing to
prefer that prospective successor above others wishing to operate t he
Business at the Premises.”
(c) Clause 1.6 of Schedule 3 further stipulates that it has:
“become [Engen’s] policy and [Engen] has now agreed that the price that an
incoming Dealer is willing to pay for access to the premises concerned may
accrue to the o utgoing Dealer [i.e. Rissik Street] as a sale of the business
KOLLAPEN J
rather than to [Engen] as consideration for the conclusion of the operating
lease. Accordingly, [Engen] has agreed that the Dealer has an ‘entrenched
value’ in the Business and is entitled to r ealise such entrenched value in the
event of the Dealer wishing to sell the Business or being required to sell the
Business pursuant to this Agreement. However it is specifically recorded that
the aforesaid entrenched value of the Dealer i s subject to the provisions of
this S chedule 3 and to the provisions of clause 44 of Schedule 2 of this
Agreement.”
(d) Clause 44.2 of Schedule 2 to the operating lease confers upon
Rissik Street the right to attempt to sell the business during the 12-month
period preceding the termination of the agreement. It provides (in the
relevant part) as follows:
“If [Engen] intends or elects for any reason not offering [Rissik Street] a
further opportunity to lease the Premises from the Termination Date of this
Agreement, [Engen] sh all endeavour to advise [Rissik Street] in writing at
least 12 months prior to the Termination Date of this Agreement. If such
advice is not provided at least 12 months prior to the Termination Date of this
Agreement, [Engen] may still provide such advice at any time prior to the
Termination Date of this Agreement provided that [Rissik Street’s] tenure at
the Premises will then be extended for a perio d beyond the Termination Date
of this Agreement to ensure that [Rissik Street] will have received at least 12
months’ notice that [Engen] intends or has elected not offering [Rissik Street]
a further opportunity to lease the Premises from the Termination Date of this
Agreement extended as aforesaid. Any extension as aforesaid will be on the
terms and conditions of [Engen’s] operating leases at such time.”
(e) Clause 44.2 then goes on to provide as follows:
“Should [Engen] advise [Rissik Street] that it doe s not intend renewing the
lease between the parties, [Rissik Street] shall be entitled to attempt to sell the
Business during the remaining period of the lease, and [Engen] shall not
unreasonably withhold its consent to such sale. Should [Rissik Street] n ot
have sold the Business prior to the expiry of the lease, the provisions of
sub-clause 44.1 of this Schedule 2 shall apply and [Rissik Street] shall not
have the right to any compensation in respect of his loss of the Business.”
KOLLAPEN J
(f) Clause 44.1 of Schedu le 2 (mentioned in the final sentence of
clause 44.2 quoted above) provides that Engen has the right, on
premature termination, to appoint a new dealer. Rissik Street is entitled
to negotiate with such new dealer in respect of any takeover of stock and
equipment belonging to Rissik Street on the premises, alternatively that
Rissik Street ha ve the right to remove stock and equipment on the
premises belonging to it.
Stay of proceedings
[52] Section 6(1) of the Arbitration Act27 provides:
“If a ny party to an arbitration agreement commences any legal proceedings in
any court (including any inferior court) against any other party to the agreement in
respect of any matter agreed to be referred to arbitration, any party to such legal
proceedings may at any time after entering appearance but before delivering any
pleadings or taking any other steps in the proceedings, apply to that court for a stay of
such proceedings.”
[53] While the parties proceeded on the assumption that section 6(1) of the
Arbitration Act is applicable, I have doubts about its applicability. The dispute before
the High Court relates to the attempt by Engen to evict Rissik Street from the leased
premises. It cannot be said that the parties agreed to refer the dispute regarding the
eviction to arbitration – something that section 6(1) contemplates as a requirement for
a stay application.
[54] Firstly, the arbitration unde r section 12B does not arise by agreement between
the parties but is rendered obligatory by statute. Secondly, the subject matter of the
High Court application and the arbitration is different, even though tangentially
related. In the High Court, the relief sought was an order for eviction, while in the
arbitration the issue is a complaint that Engen has unreasonably frustrated
27 42 of 1965.
KOLLAPEN J
Rissik Street’s right to sell their business. An award arising out of the arbitration may
influence the ongoing occupation of the premises, but these are not the same issues in
substance. It is for these reasons I conclude that section 6(1) of the Arbitration Act
cannot be called in aid.
[55] Is there another basis upon which the High Court was empowered to stay the
eviction proceedings? Section 173 of the Constitution provides that Superior Courts
have the inherent jurisdiction to regulate their own processes in the interests of justice.
Section 173 provides:
“The Constitutional Court, the Supreme Court of Appeal and the High Court each has
the inherent power to protect and regulate their own process, and to develop the
common law, taking into account the interests of justice.” (Emphasis added.)
[56] In South African Broadcasting Corp Ltd ,28 the nature of the inherent power of
the Superior Courts under section 173 is described as follows:
“The power in section 173 vests in the judiciary the authority to uphold, to protect
and to fulfil the judicial function of administering justice in a regular, orderly and
effective manner. Said otherwise, it is the authority to prevent any possible abuse of
process and to allow a Court to act effectively within its jurisdiction.”29
[57] In Mokone,30 Madlanga J referred to section 173 as providing t he basis for
the courts mentioned in the section to regulate their own processes taking into account
the interests of justice. This Court then invoked its inherent power and , after being
satisfied that it was in the interests of justice to do so, stayed proceedings for the
eviction of the applicant pending the finalisation of associated proceedings.
28 South African Broadcasting Corp Ltd v National Director of Public Prosecutions [2006] ZACC 15; 2007 (1)
SA 523 (CC); 2007 (2) BCLR 167 (CC).
29 Id at para 90.
30 Mokone v Tassos Properties CC [2017] ZACC 25; 2017 (5) SA 456 (CC); 2017 (10) BCLR 1261 (CC) at
para 67.
KOLLAPEN J
[58] Rissik Street submit that Engen’s refusal to consent to the sale of the business,
without providing reasons for the refusal, constitutes an unfair or unreasonable
contractual practice, which the arbitrator needs to correct. They argue that the
correction of the practi ce may well entail an order that will require them to remai n in
occupation of the business pending attempts to sell it without being unreasonably
impeded by Engen in their attempts to do so . They say that it is an award of that
scope that will correct the unfair contractual practi ce that Engen has committed by
declining to provide reasons for its refusal for the sale of the business.
[59] It is not in dispute that Rissik Street acquired the right to sell the business as
from 2 October 2017 and that they had 12 months to do so. Schedule 3 of the
operating lease records that Engen recognises that Rissik Street have an “entrenched
value” in the business and is entitled to realise such entrenched value. It is not in
dispute that this entrenched value has been built up over the 20 years that Rissik Street
have initiated, operated, and grown the business.
[60] In asserting their right to sell the business , Rissik Street sought consent for the
sale of the business and presented several offers made by potential buyers to Engen.
The first offers were submitted in May 2018 during the currency of the lease , while
another offer was submitted in January 2019, after the expiry of the lease . The latter
offer appears to have been triggered by a request from Engen t o Rissik Street to
submit an offer.
[61] Engen declined to give its consent in respect of the May 2018 offers. It
adopted the stance that it did not need to consider the January 2019 offer, except to
point out to Riss ik Street that the operating lease had expired and that it was required
to vacate the premises. In respect of the May 2018 offers, it took the position that it
was not obliged to give reasons for its refusal. It is this refusal without accompanying
reasons that Rissik Street take issue with and allege is an unfair or unreasonable
contractual practice.
KOLLAPEN J
[62] Whether it is in fact so is a matter for the arbitrator to determine , but what the
enquiry posits is the proper interpretation of the operating lease against the backdrop
of section 12B of the PPA. On the one hand, Rissik Street rely on clause 44.2, which
provides that Engen may not withhold its consent unreasonably . O n the other hand ,
Engen placed reliance on clause 10.1 of Schedule 3 to the operating lease , which says
that any discretion it exercises is absolute and unfettered and that it need not furnish
reasons for it.
[63] In this interpretative exercise the maxim generalia specialibus non derogant 31
(general provisions do not derogate from special ones) finds application.
Rissik Street’s entitlement not to have the consent to a proposed purchaser
unreasonably withheld is contained in clause 44.2 of Schedule 2 and is specific in
addressing the terms of Rissik Street’s right to sell the business upon termination of
the agreement. Engen’s reliance on the clause affording it the discretion to refuse
giving such reasons is a general term contained in clause 10.1 of Schedule 3 of the
operating lease. In Schedule 2 – the same Schedule that contains clause 44.2 – there is
a separate clause dealing with discretion. Clause 36.1 of Schedule 2 provides that any
consent from Engen shall not be unreasonably withheld unless it is expressly stated to
be within Engen’s discretion, “in which event [Engen] shall not be liable to give any
reasons”. This may well imply that where a provision in Schedule 2 stipulates that
consent shall not be unreasonably withheld (clause 44.2 is such a provision), Engen is
obliged to give reasons. The maxim may require the general provision in clause 10.1
of Schedule 3 to yield to the special provisions of Schedule 2, in particular ,
clause 44.2 read with clause 36.1 of Schedule 2.
31 Christie and Bradfield Christie’s Law of Contract in South Africa 8 ed (LexisNexis, Johannesburg 2022)
at 276-7 states that —
“This maxim has regularly been used in interpreting statutes, has been used in interpreting the
articles of a ssociation of a company, and given that there is no difference in approach to
interpreting legal documents, it could be used in interpreting contract.”
This position was confirmed in Consolidated Employers Medical Aid Society v Leveton [1998] ZASCA 114;
1999 (2) SA 32 (SCA) at 41A - C and in Lodhi 2 Properties Investments CC v Bondev Developments (Pty) Ltd
[2007] ZASCA 85; 2007 (6) SA 87 (SCA) at para 11.
KOLLAPEN J
[64] Whether Engen’s refusal to consent to the proposed sale of the business was
reasonable is not possible to discern in the absence of any reasons being furnished by
Engen. This is at the heart of the complaint by Rissik Street and their request to
the Controller. If Engen has an absolute and unfettered discretion to refuse to consent
and not furnish reasons , then it would not be possible for Rissik Street to properly
exercise their right to sell the business when they remain unaware of what factors
Engen takes into accou nt in deciding to grant or refuse consent to a proposed sale.
This is , however, a matter that the arbitrator will be required to consider in
determining whether Engen’s conduct in this respect constitutes an unfair or
unreasonable contractual practice.
[65] It, however, cannot be rejected as a reasonable possibility that the arbitrator
may determine that the refusal to provide reasons constitutes an unfair or unreasonable
contractual practice. In addition , even if it is found that clause 10.1 of Schedule 3
applies, whether such a stance is unfair or unreasonable would s till require
consideration and again it cann ot be rejected as a reasonable possibility that the
arbitrator may find that rel iance on clause 10.1 is an unfair or u nreasonable
contractual practice.
[66] On that basis , Rissik Street maintain that they should have the proper
opportunity to sell the business, which has not happened thus far. They go on to argue
that they require to remain in occupation of the business in order to sell it and that , if
evicted, all that they will be capable of selling will be the stock and the equipment of
the business. In addition, they only seek to remain in occupation for the period
provided for in the lease in order to sell the busi ness. They say that they were
deprived of the opportunity to sell the business because Engen unfairly or
unreasonably frustrated their attempts to do so.
[67] Rissik Street say eviction will bring to an end its ability to sell the business.
While Engen disputed this assertion in its affidavits in the High Court, at the hearing
of the matter in this Court, it conceded that this was in fact so . This was an important
KOLLAPEN J
and appropriate concession in the matrix of this application. In doing so , Engen
accepts that Rissik Street’s entrenched value in the business will dissipate in
Rissik Street’s hands if they were evicted. Despite the concession, Engen persisted in
its stance that Rissik Street’s right to sell cannot survive the currency of the operating
lease.
[68] Again, and while the arbitrator will have to determine the scope of any award
that may be made, Rissik Street have built up a business with a substantial value
(R6 million to R8 million). They acquired the right to sell the business within a
limited time-frame of 12 months and made bona fide attempts to do so. Regard being
had to Engen’s stance i n refusing to consent to the sale without providing reasons, it
cannot be rejected as a reasonable possibility that the arbitrator will find that Engen
frustrated Rissik Street’s 12-month window of opportunity to sell the business.
[69] Rissik Street say t hat they seek a fair opportunity to sell the business which
they did not have previously . As a reasonable possibility, the arbitrator might make
an award granting Rissik Street a further period of occupation to compensate it for as
much of the 12-month se lling period as they were deprived of due to the unfair or
unreasonable contractual practice.
[70] The occupation of the premises may therefore be significant in the scheme of
any corrective award that may arise in terms of section 12B. If Rissik Street were
evicted, they would not be able to sell the business including the goodwill that they
have built up. In that event, Engen will be at liberty to acquire a new tenant without
recourse to Rissik Street and the goodwill will be a factor in Engen’s favour in the
rental consideration any new tenant would be willing to pay. The operating lease
refers to this as the “entrenched value” of the business but , in substance , it is the
goodwill of the business.
[71] The consequence of all of this is that Rissik Street would, without having had
the proper opportunity to do so, have lost their right to recoup the entrenched value in
KOLLAPEN J
the business they have built up over more than 20 years . Engen, wh ich has no
equitable claim to that goodwill, w ould reap the benefits of it in the consideration it
will be able to garner from a potential new tenant. This is inequitable. It runs counter
to the transformational objectives of the PPA and only entrenches the inequality in the
fuel industry between wholesalers and retailers , by providing Engen with an undue
benefit that it was never entitled to in the form of the goodwill to the business.
[72] Such an outcome would be inimical to bringing about change in power
relations in the fuel industry, to which the PPA is committed . Courts must , in the
pursuit of these legitimate constitutional imperatives , interpret the PPA and the
contracts in the industry through the lens of the transformative commitment that the
PPA seeks to achieve. This, of course, does not mean that c ourts are at liberty to
make and impose contracts for the parties in the name of transformation and beyond
what the parties may have intended for themselves. However, section 12B enjoins the
parties to look beyond the written terms of their contracts in recognising the normative
framework of fairness and reasonableness that the section introduced as an
overarching framework that governs all contracts in the retail fuel industry.
[73] Arising from that, the interpretative question that presents itself cannot be
confined to whe ther or not the terms of the contract permit a particular contractual
practice, but whether such a practi ce conforms to the requirements of fairness and
reasonableness. If it does not , the terms of the contract cannot prevail. It , therefore,
cannot be a case where reliance on contractual terms is dispositive of a dispute
between the parties. Rather , section 12B of the PPA requires that all contractual
practices in the retail fuel industry be interrogated against the standard of fairness and
reasonableness. It represents, in many respects, a seismic but necessary shift in the
framework of contractual relationships in the retail fuel industry in the quest to
transform that industry.
[74] Reverting to the dispute before this Court, occupation of the premises may well
be key to how the arbitration unfolds and the choice of a necessary corrective award ,
KOLLAPEN J
if one is required. Engen resists the ongoing occupation of the premises and any
attempt by Rissik Street to have a court-sanctioned occupation in place as interim
relief. It relies on common law grounds for the eviction of Rissik Street and says that,
absent a claim for renewal or reinstatement of the operating lease, there exists no legal
basis for Rissik Street to continue in occupation after the expiry of the operating lease.
[75] This line of reasoning , which is also what the Supreme Court of Appe al
embraced, is premised on the assumption that Rissik Street would require the lease to
be renewed in order to ground a claim to remain in occupation. This , however, has
never been the case for Rissik Street nor is that the complaint put before
the Controller. Rissik Street contend that the relationship with Engen has broken
down, and they do not seek the renewal or reinstatement of the operating lease. The
position taken by the Supreme Court of Appeal leads , with respect , to an illogical
outcome. If Rissik Street were required to seek the renewal of the lease to secure their
ongoing occupation, then they would not have acquired the right to sell the business.
A renewal of the operating lease for five years would have precluded any sale of the
business, as a sale is only permitted in the 12 -month period before the expiration of
the operating lease. A renewal of the operating lease would not have achieved that
outcome. To that extent, the Supreme Court of Appeal erred in relying on this
reasoning and introducing this conditionality to Rissik Street’s claim in upholding the
appeal.
[76] What Rissik Street seek is not the extension or the renewal of the
operating lease, but rather the opportunity to sell its business in accordance with the
terms of the operating lease. In addition, they seek the acknowledgement that the sale
of the business is inextricably linked to their ability to remain in occupation in order to
do so.
[77] The Supreme Court of Appeal , however, concluded that even if Rissik Street’s
complaint was found to be an unfair or unreasonable practi ce, it will not vest any
KOLLAPEN J
remedial power in the arbitrator to permit Rissik Street to remain in occupation
pending the sale of the business.
[78] I disagree with this conclusion. Section 12B vests wide remedial powers in the
arbitrator, which are “necessary to correct such practi ce”. If the arbitrator finds in
favour of Rissik Street on this aspect, then it may well follow that the corrective award
necessary would be one allowing Rissik Street the opportunity to sell the business . If
that is only possible while Rissik Street remain in occupation, then under those
circumstances, occupation of the premises may well be a necessary part of any
remedial award. The pleadings in the arbitration are still to be filed , and Rissik Street
may well, in those pleadings, seek the relief of ongoing occupation pending the sale of
the business. This would be consistent with the complaint they had submitted.
[79] Section 12B does no t require an aggrieved party to specify the relief that it
seeks at the time it requests a referral to arbitration. While the terms of the arbitration
must mirror the complaint, the relief that is con sidered and ultimately granted is not
required to be spelt out in the request to the Controller, and the relief in the form of an
award is, in any event, a matter for the arbitrator to determine. It cannot be that an
aggrieved party must set out the relie f it seeks in its request and that it may in future
be barred from doing so if it does not. This narrow approach is inconsistent with what
has been described as the wide remedial power of an arbitrator acting in terms of
section 12B.
[80] It therefore follows that section 12B would not stand in the way of an arbitrator
having such powers. For clarity, it is not the power to renew or reinstate which I find
to exist , but to make an award that enables Rissik Street to continue to occupy the
premises pending the sale of the business. The source of that power is not in the
common law, but in the provisions of section 12B that oblige an arbitrator to make an
award to correct an unfair or unreasonable practi ce. Such a wide power is consistent
with the transformative objects of the PPA and the need to address the inequalities in
the fuel industry.
KOLLAPEN J
[81] The Supreme Court of Appeal erred in the conclusions it reached re garding
both the failure to raise the non -renewal of the operating lease in the request for
arbitration and in the limited manner in which it interpreted the r emedial power of the
arbitrator. It also incorrectly characterised the issue before it by its failure to make the
connection between the unfair or unreasonable contractual practice and the ongoing
occupation of the premises by Rissik Street.
[82] It follows that the appeal must succeed. Rissik Street acquired the right to sell
the business, which will not be possible if they cease to be in occupation. If evicted,
Rissik Street will suffer irreparable harm in the loss of the business, there is no other
remedy, and the balance of convenience favours the grant ing of the relief sought .
Rissik Street occupy and continue to pay “rental” so there is limited prejudice , if any,
for Engen, but an eviction will redound to the permanent prejudice of Rissik Street.
[83] The interests of justice present a compelling argument for the invocation of
this Court’s inherent power to stay the eviction proceedings pending the finalisation of
the section 12B arbitration. Paramount amongst those interests is the right of
Rissik Street to seek effective relief in the section 12B arbitration in respect of
Engen’s alleged unfair or unreasonable contractual practice. An eviction will render
nugatory Rissik Street’s right to seek effective relief in the section 12B arbitration.
Referral to arbitration and the Controller’s conduct
[84] One of the worrying features in the timeline relating to the dispute before
the Court is the period of one year that passed between the request by Rissik Street to
the Controller to refer the matter to arbitration and the decision ultimately taken by
the Controller. In addition, no less than four emails were addressed to the Controller
during this time enquiring as to when a decision would be made . There was no
response to any of those emails and the decision was only taken when the parties were
already deep into litigation.
KOLLAPEN J
[85] In Business Zone CC , this Court in reflecting on the value of the arbitral
mechanism said:
“The purpose of the [Petroleum Product s] Amendment Act ‘to provide for appeals
and arbitrations’ through section 12B cannot be overlooked. The inherent value of
section 12B enabling a party to resolve a dispute through arbitration rather than court
proceedings must be recognised. Arbitration offers an expedient, specialised and
procedurally flexible forum to resolve disputes.”32 (Emphasis added.)
[86] A delay of one year undermines the attraction of an expedient arbitral
mechanism that section 12B introduce d. If the decision to refer the matter to
arbitration was taken timeously, the real possibility exists that the arbitration could
have been finalise d before the expiration of the operating lease and the parties could
have avoided the spectre of lengthy and costly litigation.
[87] If section 12B is to achieve its objective of providing the parties to a dispute
with an expedited arbitral mechanism, the re must be a more efficient turnaround time
between the submission of a request for arbitration and a decision on that request. To
that end, I intend to direct that a copy of this judgment be submitted to the Controller
of Petroleum Products as well as th e Minster of Mineral Resources and Energy and
the Director -General of the Department of Mineral Resources and Energy for their
consideration.
Remedy
[88] The appeal must succeed and the order of the Supreme Court of Appeal falls to
be set aside . The resu lt is that the order of the High Court must prevail. I made
reference earlier in this judgment to the High Court order and my view that the order
must be interpreted in the context of the judgment of the High Court and the purpose
that the order sought to achieve.
32 Business Zone CC above n 2 at para 59.
KOLLAPEN J
[89] That being the case, it must follow that the order staying the eviction and found
in paragraph 23.1 of the order of the High Court, should as a matter of caution read as
follows:
“That the current proceedings are stayed pending the decision by the C ontroller and
the final outcome of any process arsing therefrom.”
[90] Apart from that being consistent with the judgment and the order of the
High Court read as a whole, it was also evi dent from the proceedings in the
Supreme Court of Appeal, as well as in the hearing before this Court , that the parties
proceeded on the assumption that the order granted by the High Court was a stay of
eviction pending the final outcome of the section 12B arbitration. There can
accordingly be no prejudice to any of the parties if the High Court order is interpreted
to give proper effect to its purpose.
Conclusion
[91] I am satisfied that a proper case was made out for the interim relief in the form
of a stay of eviction that Rissik Street seek. Leave to appeal must be granted and the
appeal must be upheld. The order of the S upreme Court of Appeal must be set aside
and substituted with the order of the High Court.
Order
[92] The following order is made:
1. Leave to appeal is granted.
2. The appeal is upheld.
3. The order of the Supreme Court of Appeal is set aside and replaced with
the following:
“a) Subject to (b) below the appeal is dismissed with costs.
b) The stay granted in paragraph 23.1 of the High Court’s order will
endure pending the final outcome of any process arising from the
applicants’ request to the Controller of Petroleum Products
KOLLAPEN J
(Controller) in terms of section 12B of the Petroleum Products
Act 120 of 1977.
c) The respondent is interdicted from taking any steps that will
adversely affect the oper ations of the first applicant pending the
final outcome of the process referred to the Controller.”
4. The respondent is to pay the costs of the applicants in this Court,
including the cost of two counsel.
5. The Registrar of this Court is directed to forw ard a copy of this
judgment to the Minister of Mineral Resources and Energy, the
Director-General of the Department of Mineral Resources and Energy ,
and the Controller and to draw their attention to [85] to [88] of the
judgment.
For the First and Second Applicants:
For the Respondent:
G Quixley and M De Beer instructed
by Seton Smith and Associates
S Aucamp instructed by
Mathopo Moshimane Mulangaphuma
Incorporated t/a DM5 Incorporated