B P Southern Africa (Pty) Ltd v Twoline Trading 87 (Pty) Ltd t/a Sheffield service Station (14140/02) [2002] ZAGPHC 24 (30 August 2002)

NOT

REPORTABLE

IN

THE HIGH COURT OF SOUTH AFRICA

(WITWATERSRAND LOCAL DIVISION)

JOHANNESBURG

CASE NO: 14140/02

DATE:2002-08-30

In the matter between

B P SOUTHERN AFRICA (PTY) LTD........................................................................... Applicant

and

TWOLINE TRADING 87 (PTY) LTD

t/a

SHEFFIELD SERVICE STATION........................................................................Respondent

JUDGMENT

WILLIS J: The applicant has approached the court by way of urgency seeking the following relief:

(a) Dispensing with the rules of the above honourable court with respect to time periods and form and hearing this application as a matter of urgency.

(b) Directing the respondent and all persons occupying portion 75 (a portion of portion 4B) of the farm Hartbeesfontein 312 situated at corner Sheffield Road and Golden Highway, Lenasia South to vacate such premises.

(c) Interdicting the respondent from selling any petroleum products, including fuel, diesel and LB gas on or from the said premises.

(d) Interdicting the respondent from conducting the business of a garage, filling station or service station using the BP trademarks,

tradename, insignia and emblems on the premises.

(e) Interdicting the respondent from holding itself out to the public as an entity entitled to use the BP trademarks, tradename, insignia and emblems on the premises.

(f) Directing the respondent to pay the costs of this application.

(g) Alternatively to paragraphs (b) - (e) above that pending the final determination of the relief sought in paragraphs (b) - (e) above, an interim order be granted in terms of paragraphs (b) - (e) above.

The papers in this matter are voluminous. They run to some 736 pages. They steam with accusations and counter accusations and frustration,

resentment and anger. They also bristle with antecedent contracts and various rights and obligations that have been ceded, assigned,

delegated, delivered and otherwise transferred to various parties over the years. Nevertheless, counsel for both the applicant and the respondent were ad idem that in respect of the relief sought in (b) of the notice of motion the entire case turns an the interpretation to be given to a specific clause in a lease agreement, to which I shall refer later.

In respect of (c) the entire case turns on the enforceability of what I shall term a servitudal clause which was notarially registered and later recorded in the relevant deed of transfer. With regard to (d) and (e), it is common cause that the respondent no longer conducts the business of the applicant and expressly disavows any intention to do so from the premises, in other words there is no risk whatsoever to the applicant insofar as (d) and (e) are concerned (i.e. there is no injury committed or reasonably apprehended) and accordingly in my view I need not deal with those issues. Clearly in view of the fact that it is common cause that the respondent had no intention of infringing the applicant's rights in this regard and if it is not doing so or reasonably apprehended that it will do so, there is no need for an interdict.

I shall accordingly turn to deal with the relief sought in (b) and (c). It is common cause that the respondent is the owner of the property that forms the subject matter of this particular interdict. It is also common cause that the respondent has on these premises what is commonly known as a "petrol filling station." The respondent did conduct business from this petrol station as

franchisee, in effect, to the applicant as franchisor until the purported cancellation of various agreements, one of which forms the kernel of the dispute between the parties.

It is common cause that the applicable clause in the so-called principal lease between the applicant and the respondent is 27.1, which reads as follows:

"This principal lease is one of a series of related documents (hereinafter referred to as 'the related documents'). It is agreed that notwithstanding the observance and performance of all the governance and conditions contained in this principal lease should there be any breach of any one or more of the related documents (excluding this principal lease) by any party hereto (other than BP Southern Africa (Pty) Limited! or should any one or more of the related documents (excluding this principal lease) be cancelled or terminated for any reason whatsoever (otherwise than by effluxion of time) then in such event the lessor shall be entitled without notice to cancel the deed of principal lease forthwith."

The underlining of the words "the lessor" in the very last phrase was added with emphasis by the applicant and in this judgment it is emphasised by me. It is common cause that the respondent is the lessor referred to in this agreement. It is also common cause that having leased the property to the respondent, the applicant then in turn subleased the property back to the respondent. The respondent claims that it has exercised its right in terms of clause 27.1 to cancel the aforesaid lease. There is no dispute that this is indeed what the respondent has purported to do. There is no dispute that in terms of clause 27.1, as it reads at present, the respondent is indeed entitled so to do.

The applicant however submits that the words "the lessor" should be rectified to read "the lessee." It submits that there had been a patent error and that to interpret the clause leaving the words "the lessor" as it stands would lead to some absurdity, which this court obviously is entitled to rectify. Certainly it does not appear to me that this is obviously a typing, spelling or grammatical error, nor does it appear to me that this error arises as a result of some syllepsis on the part of whoever dictated the agreement, if indeed the agreement was dictated.

I am also of the view that if I were to take a random sample of reasonable men and women travelling, for example, on the bus to the Ubuntu Village one would not find that all of them, nevermind a substantial majority of them, would on reading this clause protest immediately "Oh yes, of course yes, clearly the words 'the lessor' should read the words 'the lessee'." I am prepared to accept that if one has regard to the contract as a whole it may well be that a mistake was made and that the words "the lessor" should read "the lessee." Certainly the contract as a whole was drafted in such a way that it tends to favour at almost every turn the interests of the applicant.

On the other hand there are sound commercial reasons why the respondent would wish to reserve this particular right. Furthermore it ordinarily occurs in lease agreements that it is the lessor that has the right to terminate an agreement in circumstances such as this rather than the lessee. But more importantly there are fundamental disputes of fact. The signatory to the original document on behalf of Anchor Construction (Pty) Ltd, the predecessor to the respondent, disputes this attempt at that rectification. Anchor Construction (Pty) Ltd was at the time represented by an attorney, Mr Ismail, who says: "I confirm that the present wording of clause 27.1 of the principal lease is correct. There is no error as suggested by BP. It was agreed that Anchor as lessor would have the right to terminate the principal lease if any of the related documents in schedule X in clause 27.1 were terminated for any reason whatsoever."

I do not believe that I can possibly in motion proceedings in one fell swoop rectify this particular clause and then treat as a nullity the respondent's cancellation of the agreement and evict the respondent from the premises of which it is the owner. I would wish to add that ordinarily if a party wishes to seek rectification of an agreement the proper procedure is to come to court by way of action rather than motion unless there are reasons to believe (as normally applicable in motion proceedings}, that there will be no disputes of fact. I should point out that it is the respondent's case in the answering affidavit that these disputes of fact were well-known to the applicant before it brought this particular application.

Accordingly the applicant must fail in seeking to obtain the relief sought in prayer (b).

Insofar as prayer {c} is concerned, it is, as I have already said, common cause that the applicant's entitlement to this relief depends upon the enforceability of certain servitudal clauses in a notarial deed of servitude executed on 11 December 1992 between the applicant and Anchor Construction (Pty) Limited, one of the respondent's predecessors in title. It is, as I have already indicated, common cause between the parties that this notarial servitude was subsequently recorded (although not the detail thereof! in the

relevant deed of transfer.

Accordingly the respondent would be deemed to have had notice of this servitude. The relevant clauses read as follows:

"1.1 The property shall at no time be used for the purpose of erecting there on, nor shall there be carried on there on at any time any or all of the business of a garage, petrol filling and service station, save and except a garage, petrol filling and service station marketing petrol to the petrol pumps of the grantee {together with such other pumps as from time to time may be consented to by the grantee) installed or to be installed upon the property.

1.2 No petroleum products and/or fuel other than those supplied by the grantee shall be stored, sold or distributed on or from the property without the prior written consent of the grantee." The respondent has averred in its answering affidavit that if the interdict is granted in the terms covered by prayer (c) it will be rendered insolvent. Mr Du Toit, who appeared for the respondent, had raised certain objections to the servitude. Inter alia, he has submitted that it imposes positive obligations upon the respondent

and therefore is not a servitude properly so called. He has furthermore submitted that in any event there was an agreement in terms of which the applicant consented to the sale of Sasol products from the petroleum station and that his client should at the very least be allowed to sell Sasol products from this particular service station.

Deeds Registries Act, all real rights in respect of immovable property are registerable. To determine whether a particular right or condition in respect of land is real two requirements must be satisfied:

(1) The intention of a person who creates the real right must be to bind not only the present owner of the land but also his successors in title; and

(2) The nature of the right or condition must be such that the registration of it results in a 'subtraction from dominium' of the

land against which it is registered.

See Cape Explosives Works Limited and Another v Dene! (Pty) Limited and Others 2001 (3) SA 569 (SCA) at 578D-E and Erias Properties (Pty) Limited v Registrar of Deeds and Others 1992 1 SA 879 (A} at 885B.

The parties were ad idem that the servitude, as registered, does indeed constitute a real right, although it is not a praedial servitude but rather a personal servitude. In the case of Basson v Chi/wan and Others 1 993 (3) SA 742 (A| at 767F-H Nienaber J, as he then was, sets out four questions which arise in resolving the question of whether a protection is deserving of restraint. This judgment has been referred to, with approval, in a number of cases, most notably Kwik Kopy SA (Pty) Limited v Van Haarlem and Another 1999 (1) SA 472 (W) by Wunsh J, and Nampesca (SA) Products (Pty) Limited v Zaderer and Others 1999 1 SA 886 (C) by Van Reenen J.

The four questions are the following:

(a) Is there an interest deserving of protection at the

termination of the agreement?(b) Is that interest being prejudiced?

(c) If so, how does that interest weigh up qualitatively and quantitatively against the interest of the other party not to be economically inactive and unproductive?

(d) Is there another facet of public policy not having anything to do with the relationship between the parties which requires that the restraint should either be enforced or disallowed?

Wunsh J in the Kwik Kopy case added a further consideration, namely whether the restraint is wider than what is necessary to protect the protectable interest. There has been some disagreement of opinion in subsequent cases as to whether or not this condition is appropriately applicable, and I shall not have regard thereto in this judgment. With regard to (a) and (b) of the four considerations referred to in the Basson v Chilwan case, I shall assume in favour of the applicant that there is indeed an interest deserving of protection at the termination of the agreement and I shall also assume in favour of the applicant that that interest is being prejudiced.

Before dealing with (c) and (d), I record that I am in substantial agreement with the submission of Mr Du Toit that although the servitude in question superficially satisfies the requirements of the Deeds Registry Act for registration of a servitude, it is really a marketing policy dressed up as a servitude. It should also be noted that the servitude binds the owner of the land together with their successors in title for some 20 years. In my view weighing up the interests qualitively and quantively of the applicant against the interests of the respondent not to be economically inactive and productive strongly suggests that the servitudal clause should be treated as unenforceable.

If one balances out the interests of the two panties it would in my view be unconscionable that the respondent, as owner of land on which there is already an existing petrol station, may not use that land effectively for any economic purpose. After all there is a petrol station. The agreement to supply products of the applicant from that petrol station has ceased and if the respondent is to be prohibited from selling the products of a competitor it will face financial ruin. This much is obvious, even if one does not have regard to the allegations in the answering affidavit.

Furthermore it seems to me that the temper of our times is very much in favour of free competition and indeed the sentiment of our times is that society as a whole is benefited by robust competition among economic players in our society. Insofar as (d) is concerned, namely is there any other facet of public policy not having anything to do with the relationship between the parties which requires that the restraint should either be enforced or disallowed, in my view it is not inappropriate to have regard to section 22 of our Constitution which provides that every citizen has the right to choose their trade, occupation or profession freely.

Section 39(2) of our Constitution requires the courts to promote the spirit, purport and objects of the Bill of Rights in the Constitution and there have been a number of cases decided by the constitutional court which have made it clear that the high court is expected to apply and develop the common law against the background of South Africa's Constitution. In my view preventing the respondent from being allowed to trade in products other than those of the applicant by relying on a servitudal clause such as the one in question which the respondent did not directly agree to does not accord with the spirit of our Constitution and there would have to be truly special circumstances to justify this, if ever it may be justified. They are not present.

Accordingly in my view the applicant must fail in its attempt to obtain the relief in (c) of the notice of motion. I have already dealt with (d) and (e) thereof. This has been a legally complex matter. The stakes are high and the interests of the parties considerable and the tensions acute. Both parties engaged the services of two counsel and both parties agreed that whatever costs order be made should include the costs of two counsel.

The following order is made: The application is dismissed with costs, which costs are to include the costs of two counsel.

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