Pine Glow Investments (Pty) Ltd t/a Caltex Mpumalanga North Marketer v Controller of Petroleum Products and Others (5551/2022) [2023] ZAMPMBHC 53 (9 October 2023)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

(MPUMALANGA DIVISION, MBOMBELA)

CASE NO: 5551/2022

(1) REPORTABLE:NO

(2) OF INTEREST TO OTHER JUDGES: YES

(3) REVISED: YES

DATE: 09/10/2023

SIGNATURE

In the matter between:

PINE GLOW INVESTMENTS (PTY) LTD t/a

CALTEX MPUMALANGA NORTH MARKETER

Applicant

and

THE CONTROLLER OF PETROLEUM PRODUCTS

First Respondent

THE MINISTER OF MINERAL RESOURCES AND ENERGY Second Respondent

BP SOUTHERN AFRICA (PTY) LTD

Third Respondent

OPCO201901 (PTY) LTD

Fourth Respondent

PICK ‘N PAY STORES LTD

Fifth Respondent

This judgment was handed down electronically by circulation to the parties and/or parties’ representatives by email. The date and time for hand-down is deemed to be 09 October 2023 at 10:00.

JUDGMENT

MASHILE J:

INTRODUCTION

[1] In early 2023, the Applicant (“Pine Glow”) launched an application seeking, relief in the following terms:

1.1.1. “A declaratory order that any site and retail licenses issued by the Controller to the 3rd and 4th respondents in terms of the Petroleum Products Act, 120 of 1977 as amended (“the PPA”) prior to 4 March 2021 are not valid, alternatively, an order that the Controller forthwith revoke such site and retail licences as provided for in PPA Regulation 34.

1.2. An order prohibiting the 3rd and 4th respondents from:

1.2.1 continuing with the delivery and/or receipt of petroleum products to the BP Riverside filling station property; and

1.2.2 continuing with or allowing the continuation of the retailing of petroleum products at the said filling station property;

unless and until the Controller issues site and retail licenses in accordance with section 2A(1) of the PPA read with PPA Regulations 3(1)(b)(ii) and 15(1)(b)(ii) for which application was made after 4 March 2021 being the date on which an environmental authorisation for the filling station was first issued.

1.3 An order compelling the Controller to forthwith direct the 3rd and 4th respondents to:

1.3.1 cease the delivery of petroleum products to the BP Riverside filling station property, and/or cease receiving such products; and

1.3.2 cease with the retailing of petroleum products at the said filling station property and/or allowing the continuation of such retailing; as required by section 2A(2)(a) of the PPA.”

[2] The application aforesaid, to which I will henceforth refer to as the main application, was opposed by the Third Respondent (“BP Southern Africa”) on various grounds. Alleging that following delivery of the answering affidavit it was apparent that BP Southern Africa admitted that the retail license was issued to it on 22 January 2020, Pine Glow sought to amend the grounds on which it had based the main application in favour of the admissions made by BP Southern Africa and OPCO. The proposed relief, if allowed, will now read as follows:

“1.1 That a declarator order be issued declaring that the retail license issued to the Fourth Respondent, on 22 January 2020 lapsed through the effluxion of time and operation of law on 21 January 2021, alternatively 21 July 2021, in terms of Regulation 24(1) of the Regulations regarding Petroleum Products Site and Retail Licenses, R286 of 2006.

1.2 That a declarator order be issued declaring that the site license issued to the Third Respondent, lapsed through the operation of law on 21 January 2021, alternatively 21 July 2021, in terms of section 2B(3)(c) of the Petroleum Products Act, 120 of 1977.”)

[3] BP Southern Africa opposes the application on three grounds and these are that:

3.1 the application is mala fide or is in bad faith;

3.2 The proposed amended relief is not buttressed by averments made in the founding affidavit;

3.3 BP Southern Africa will be prejudiced in the event that this court exercises its discretion in favour of Pine Glow.

[4] The terse background of this matter is that on 27 July 1998 BP Southern Africa acquired the site on which the filling station is situated. In about December 1998, the filling station commenced with sales of petroleum products to the public. In 2017, the filling station was upgraded. This included the petroleum storage, retail and non-petroleum retail facilities at the filling station.

[5] As the upgrade was taking place, the Fourth Respondent (“Opco”) was appointed to take over the sale of petroleum activities at the site. To this end, in July 2019 an application for a retail license was submitted. BP Southern Africa alleges that Pine Glow was aware of these developments, including the application for a retail license by OPCO.

[6] It is not disputed that Pine Glow took part in the application process for the retail license. On 30 August 2019, the attorneys of Pine Glow at the time, Erasmus Environmental and Development Law Attorneys, sent a letter to the First Respondent (“the Controller”) objecting to the granting of a license. on 28 January 2020, Pine Glow brought an urgent application seeking an order interdicting BP Southern Africa and OPCO from commencing with or continuing with the retail of petroleum products at the filling station pending, “authorisation in terms of National Environmental Management Act, 44 of 1966 (“NEMA”) of the establishment of a filling station” and “final disposal of the appeal of Pine Glow against the Controller’s decision to grant a retail license to OPCO.

[7] Deposing to the replying affidavit in the main application, Mr Le Roux (“Le Roux”), on behalf of Pine Glow, concedes that it was aware of the application for a retail license and that it participated in the application process but was not aware of the date of issue of the license, which is what Regulation 24(1) of Petroleum Products Act No. 120 of 1977 (“PPA”) mentions as opposed to date of grant of the license. Both Le Roux and the deponent to the

founding affidavit of the main application, Mr N Omar (“Omar”) were among the four directors of Pine Glow who resolved at a meeting of 27 January 2020 to institute the urgent application.

[8] The resolution, among others, provides that an order be sought interdicting BP Southern Africa and OPCO from commencing or continuing with the sale of Petroleum products at the filling station pending “… final disposal of the appeal of Pine Glow against the decision of the Controller to grant a retail license to OPCO. The resolution further authorised Mr Moeen Ismail Omar (“Omar”), one of the directors of Pine Glow, to depose to any declarations necessary to give effect to the resolution. It is manifest from the affidavit to which Omar subsequently deposed that Pine Glow was mindful, at least from 24 January 2020, that the Controller had granted a license to BP Southern Africa.

[9] Le Roux alleges that the need for this amendment application was brought about by Pine Glow acquiring knowledge of the date on which the license was issued - 18 January 2023. As such, the relief sought in the proposed amendment stems from new information disclosed subsequent to the founding affidavit of Pine Glow. Had the information been available prior to the launching of this application, Pine Glow would have incorporated the question of the issuing of the license to BP Southern Africa and OPCO in the founding affidavit.

[10] The urgent application to which I alluded above launched by Pine Glow on 28 January 2020 was ultimately withdrawn on the understanding that BP and OPCO would prior to commencing with the operation of the filling station first furnish a 60-day notice of their intention to do so to Pine Glow. In July 2020, BP Southern Africa and OPCO prepared and submitted an application for rectification in terms of section 24G of the National Environmental Management Act No. 107 of 1998 (“NEMA”) to the Mpumalanga Department of Agriculture, Rural Development, Land and Environmental Affairs.

[11] On 4 March 2021, authorisation for the activities at the filling station in terms of NEMA was granted. Pine Glow appealed against the NEMA authorisation. On 3 May 2022, the Mpumalanga Member of the Executive Committee for Agriculture, Rural Development, Land and Environmental Affairs dismissed the appeal against the NEMA authorisation. On 26 July 2022 and following the NEMA authorisation, the attorneys of BP Southern Africa wrote to the attorneys of Pine Glow to advise that they intended to proceed with the development and operation of the BP Riverside in accordance with the conditions of the Environmental Authorisation and the relevant Environmental Legislation.

[12] The attorneys of Pine Glow wrote back on 27 July 2022 contending that the licenses for Riverside were not valid anymore as it has not been a going concern since 2017. The attorneys further advised that their instructions were to demand that the Controller confirms that the licenses were no longer valid and that if they were, they would be withdrawn in terms of PPA Regulation 34 on the grounds of having been issued after BP Southern Africa had made a false declaration to the Controller.

[13] BP Southern Africa and OPCO assert that the failure of Pine Glow to disclose that it has been aware of the granting of the retail license since 24 January 2020 and its deliberate silence on the fact that it also participated in the process that lead to the granting of the license to BP Southern Africa and OPCO as being in bad faith. In this regard, BP Southern Africa and OPCO point out that Pine Glow even appealed against the decision of the Controller to grant a retail license to BP Southern Africa and OPCO prior to environmental authorisation. Additionally, Pine Glow also brought an urgent application on 28 January 2023 to prohibit BP Southern Africa and OPCO commencing or continuing to retail in petroleum products pending the outcome of its appeal. All these, say BP Southern Africa and OPCO are demonstrations of Pine Glow’s mala fide.

[14] In the second place, BP Southern Africa asserts that the founding affidavit of Pine Glow in the main application does not lay any groundS for the proposed amendment. It is settled that an Applicant ought to set out all the allegations on which it/he/she relies in its founding affidavit. The proposed amendment is a prayer for declaratory relief for which Pine Glow provides no basis for it in the founding affidavit. Pine Glow makes no reference to regulation 24(1) of PPA in the founding affidavit whatsoever. For this reason, BP Southern Africa and OPCO urge this court to dismiss the application on the ground that the proposed amendment finds no support in the founding affidavit.

[15] Lastly, BP Southern Africa and OPCO maintain that they will be prejudiced in the event that this court exercises its discretion in favour of allowing the amendment. The proposed amendment introduces a new case in reply and constitutes abandonment of the original relief. BP Southern Africa and OPCO argue that they are entitled to be informed of the case which they are required to meet from the outset. To the extent that Pine Glow has stopped short of doing so, they are highly prejudiced.

[16] BP Southern Africa and OPCO have not had opportunity to answer the case that is advanced by Pine Glow now. They disavow the claim by Pine Glow that there is no dispute that there was no compliance with regulation 24(1) of the PPA. The prejudice cannot, asserts BP Southern Africa and OPCO, be adequately addressed by them simply filing a further affidavit. The amendment that is proposed is entirely new and will as such, require the parties to file further affidavits outside of the usual sequence for the filing of affidavits.

[17] The unavoidable result of this, argues BP Southern Africa and OPCO, will be that the application will be decided on an exchange of affidavits occurring after reply rendering the issues addressed and affidavits exchanged prior thereto essentially redundant. This will not ensure the orderly identification of the issues between the parties and the efficient disposal of the dispute. BP Southern Africa and OPCO conclude that it will be fair and just that Pine Glow withdraws the main application, tender’s costs thereof and may then proceed with the proposed amendment as a fresh application.

[18] Pine Glow contends that all that the proposed amendment seeks to accomplish is to bring its claim in line with the admissions made by BP Southern Africa and OPCO in their answering affidavit. The admission made by those parties being that the retail license was issued on 22 January 2020 and that they only commenced with the selling of petroleum products in December 2022. That being the case, in terms of Regulation 24(1) of the PPA the retail license lapsed on 21 January 2021 by effluxion of time or by operation of law.

[19] Similarly, asserts Pine Glow, the site license also lapsed on 21 January 2021 as its existence and validity is dependent on a valid retail license. Accordingly, if the retail license ceased to be valid on 21 January 2021, so did the site license in terms of Section 2B (3)C) of the PPA. Pine Glow is arguing further that the main application sought to challenge the license on the ground that the licenses were granted prior to BP Southern Africa and OPCO obtaining Environmental Authorisation for the operation of the filling Station. Now that BP Southern Africa and OPCO have made the admissions mentioned above, it is sensible to amend to bring congruency.

[20] Pine Glow states that the proposed amendment is not mala fide. It admits that it became aware that a retail license was granted to OPCO on 12 December 2019 on 24 January 2020. That said, it draws a distinction between the dates of grant and issue of the license. It argues that it only became mindful of the issued license to OPCO on 18 February 2023 when it was provided with a photograph of the date of issue of the retail license OBTAINED AT THE FILLING STATION.

[21] Pine Glow further asserts that there is no coherent reason why the costs that it has tendered in respect of the amendment and calling upon BP Southern Africa and OPCO to respond to the proposed amendment should not be able to addressed the prejudice about which the parties complain. BP Southern Africa and OPCO will be in no worse situation than they were when this application began.

[22] The issue to be distilled from the above facts and assertions of the parties is whether or not Pine Glow has made a cogent case for this Court to grant the application for the amendment of its notice of motion. In considering that main issue the following will have to be traversed:

[22] Has Pine Glow accounted for the delay in the launching of the application such that one can state that it is in good faith?

22.2 Is the prejudice raised by BP Southern Africa and OPCO of such a nature that it cannot be cured by costs?

[23] Regulation 24(1) of PPA that I have mentioned above and which is central to this amendment application provides that a licensed retailer must commence with retailing activities at the corresponding licensed site within a period of 12 months after the date on which a retail license is issued to the licensee, failing which the license shall lapse. Section 2B (3)C) of PPA prescribes that any license issued by the Controller of Petroleum Products remains valid for as long as, in the case of a site, there is a corresponding valid retail license.

[24] It is trite that the power of the Court to allow amendment is limited only by consideration of prejudice or injustice to the opponent.[1] The fact that the outcome of the amendment may result in the one party losing the case is no reason not to allow an amendment. The general approach is, it would seem, to tolerate amendments especially in instances where the application to amend is not characterised by mala fide and where such amendment will not cause injustice or prejudice to the other party. The amendment will readily be granted in particular, where the injustice or prejudice can be cured by either postponement or costs.[2]

[25] BP Southern Africa and OPCO contend that there is no reason why this application to amend was not brought at the earliest opportunity. According to them, Pine Glow could have done so as soon as it acquired knowledge that the Controller had granted the license to BP Southern Africa and OPCO. This was on 24 January 2020. The application should have been brought shortly thereafter. The fact that Pine Glow maintains that it acquired knowledge of the issue of the license to BP Southern Africa and OPCO on 18 January 2023 is in bad faith in circumstances where Pine Glow has participated in circumstances that lead to the granting of the license.

[26] It appears that the parties are arguing at cross purposes. Pine Glow clearly admits that it became aware that the Controller had granted a license to BP Southern Africa and OPCO on 24 January 2020 but did not know of the date on which the license was issued. It is in this context that Pine Glow saw no need to fully account for the period between its withdraw of the urgent application on the understanding that BP Southern Africa and OPCO would not commence or continue with the sale of petroleum products without first giving it a sixty-day notice to do so and the date on which it launched this application.

[27] Needless to state that BP Southern Africa and OPCO gave that notice in 2022 and subsequently commenced retailing petroleum products at the filling station in December 2022. This is what drew the attention of Pine Glow wanting to establish whether a license was in fact issued and if so, when. It sent a person to investigate the outcome of which was the picture bearing the date of issue of the license taken on 18 February 2023 at the filling station. I find it extraordinary that BP Southern Africa and OPCO refer to the knowledge that Pine Glow had of the date on which the Controller granted the license but proceed to conclude that Pine Glow had known of the date of 22 January 2020 – the date of issue of the license. These are two distinct dates. The one having happened on 12 December 2019, and the other, on 22 January 2020.

[28] In the circumstances, I am satisfied that Pine Glow did not know of the date of issue of the license until 18 February 2023, as claimed. A different conclusion can only be reached by confusing the date of issue and grant of the license. The question of the participation of Pine Glow in the process that lead to the Controller granting the license becomes immaterial and, in any event, it is not denied by Pine Glow. Similarly, the urgent application withdrawn by Pine Glow served its purpose insofar as BP Southern Africa and OPCO undertook not to commence with the sale of petroleum products without first notifying Pine Glow. Against that background, it is inexorable to conclude that the application is not mala fide.

[29] BP Southern Africa and OPCO are aggrieved because the founding affidavit in the main application makes no allegations to sustain the proposed amendment. Pine Glow has admitted that it was not aware of the provisions of Regulation 24(1) and Section 2B (3)C) of PPA and that it was upon consultation with its counsel that it was advised that BP Southern Africa and OPCO have admitted that the licenses had lapsed by the effluxion of time or by operation of law. Pine Glow could not therefore have made the relevant allegations to sustain a claim that was not foreshadowed in the notice of motion. The purpose of this application to amend is to correct that very situation.

[30] It is generally accepted that an applicant must make out his case in a founding affidavit but this cannot find application where some basis to sustain one’s claim, through no fault of that party, emerge subsequent to the issuing and delivery of the founding papers or where, such as in casu, the respondent makes a significant concession on a point of law in the answering affidavit. I agree with Pine Glow that since its challenge in the main application concerns the invalidity of the license the cause of action is similar as that sought in this amendment application albeit that the basis becomes different. Accordingly, it is of no moment that the grounds that are proposed in the amendment were not in the notice of motion in the main application especially because BP Southern Africa and OPCO will be afforded opportunity to respond.

[31] Turning to the prejudice likely to be suffered by BP Southern Africa and OPCO were this Court to exercise its discretion in favour of allowing the amendment. I disagree that the proposed amendment amounts to the opening of a new cause of action in reply and constitutes abandonment of the original relief. The actual position is that the objective of the main application was to declare the license the Controller issued to BP Southern Africa and OPCO invalid. The intended outcome of the amendment remains one of declaring the license invalid admitting, of course, on different grounds. BP Southern Africa and OPCO are in no worse position than they were when the proposed amendment was launched.

[32] BP Southern Africa and OPCO have themselves to blame by admitting that the Controller issued the license on 22 January 2020 and that it only commenced with the retailing of petroleum products in December 2022. This is an admission that the license is invalid and if that is the case, why should Pine Glow not rely on a legal point that has been conceded? In any event, the admission amounts to a concession that BP Southern Africa and OPCO are operating the filling station illegally.

[33] This must be so because both licenses lapsed on 21 January 2021. A refusal of the amendment will amount to allowing BP Sothern Africa and OPCO to perpetuate the illegality. The interest of justice will be better served if allowing the amendment will result in observance of the rule of law. I have already stated that while BP Sothern Africa and OPCO were entitled to be informed of the case that they have to meet; Pine Glow was not aware of the admissions that would be made and its Counsel gave advice that it was the most sensible manner of approaching the declaration of invalidity of the licenses.

[34] I agree with Pine Glow that allowing BP Southern Africa and OPCO to deliver a further affidavit will ameliorate the prejudice that might be visited upon them. I fail to understand how the delivery of further affidavit especially necessitated by the amendment outside of the normal three affidavits can possibly prejudice BP Southern Africa and OPCO. As stated, allowing delivery of further affidavits is meant to alleviate the prejudice. It could be that the exchange of further affidavits outside of the norm will render the issues contained in the initial affidavits totally redundant but that is in the nature of amendments particularly where they are granted. How this will not ensure the orderly identification of the issues between the parties and the efficient disposal of the dispute leave me baffled.

[35] It will never be in the interest of justice for Pine Glow to be ordered to withdraw the application only to institute another seeking to declare the licenses invalid. This cannot be done without delay and attraction of more costs for both parties. Besides, this Court will be remiss to allow the illegality to linger interminably. There is nothing that will confuse the issues. The main issue to be determined by the main application is the validity of the licenses and that persists in the proposed amendment. The prejudice, if any, is further curtailed by the costs that Pine Glow has tendered. Against that background, the application must succeed and I make the following order:

1. Pine Glow is granted leave to amend the notice of motion in the main application, case number: 5551/2022, by substituting the prayers contained therein in the following manner:

It is declared that:

1.1 The retail license issued to OPCO, on 22 January 2020 lapsed through the effluxion of time and operation of law on 21 January 2021, alternatively 21 July 2021, in terms of Regulation 24(1) of the Regulations regarding Petroleum Products Site and Retail Licenses, R286 of 2006;

1.2 The site license issued to BP Southern Africa lapsed through the operation of law on 21 January 2021, alternatively 21 July 2021, in terms of section 2B(3)(c) of the Petroleum Products Act, 120 of 1977;

1.3 The Controller, BP Southern Africa, and OPCO together with any other respondents who oppose this application are ordered to pay the applicant’s costs jointly and severally, the one paying the others to be absolved.

2. The costs of this application are awarded against the Controller, BP Southern Africa and OPCO.

B A MASHILE

JUDGE OF THE HIGH COURT OF SOUTH AFRICA

MPUMALANGA DIVISION, MBOMBELA

APPEARANCES:

Counsel for the Applicant: Adv MC Erasmus SC Instructed by: WDT Attorneys Inc Counsel for the Respondent: Adv P Lazarus SC Adv D Smith Instructed by: Norton Rose Fulbright South Africa Inc C/O Obert Ntuli Inc Date of Judgment: 09 October 2023

[1] B1-179 of Superior Court Practice by Erasmus, Farlam, Fichardt & Van Loggerenberg

[2] Devonia Shipping Ltd v MV Luis (Yeoman Shipping Co Ltd Intervening) 1994 (2) SA 363 (C), O'Sullivan v Heads Model Agency CC 1995 (4) SA 253 (W) and Luxavia (Pty) Ltd v Gray Security Services (Pty) Ltd 2001 (4) SA 211 (W)