Pine Glow Investments (Pty) Ltd v Minister of Energy and Others (A58/22) [2023] ZAMPMBHC 50 (24 August 2023)

SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA,

MPUMALANGA DIVISION (MAIN SEAT)

Case Number: A58/22

1.REPORTABLE: YES/ NO

2.OF INTEREST TO OTHER JUDGES: YES/NO

3.REVISED.

DATE: 24 August 2023

[SIGNED]

SIGNATURE

In the matter between:

PINE GLOW INVESTMENTS (PTY) LTD

Appellant

and

THE MINISTER OF ENERGY

First Respondent

AND OTHERS

Second to Tenth Respondents

This judgment will be handed down electronically by circulation to the parties’ legal representatives by email and release to SAFLII. The date and time for hand-down is deemed to be at 11h00 on 24 August 2023.

JUDGMENT

Roelofse AJ:

INTRODUCTION

[1] The true adversaries in this dispute are the appellant (hereinafter referred to as “Pine Glow”) who was the applicant in the court a quo and the third and fourth respondents (hereinafter referred to as “Erf [...]” and “NAD”

respectively).[1] I shall refer to the court a quo (Mashile J sitting) as “the court” save for in the headings in this judgment in order to avoid confusion between this court and the court a quo.

[2] The initial dispute concerned decisions of the Minister of Energy (the Minister) and the Controller of Petroleum Products (the Controller). In the court and in this appeal the dispute now only involves the Controller.[2]

[3] The resolution of the dispute lies within the realm of the Petroleum Products Act 120 of 1997 (“the Act”) and the Promotion of Administrative Justice Act 3 of 2000 (PAJA).

[4] Pine Glow is the site licence holder for the Caltex Acornhoek Mall Filling Station and a fuel wholesaler to, inter alia, other filling stations in the Acornhoek area.

[5] Erf [...] applied to the Controller for a retail licence and was granted same by the Controller after a successful appeal to the

Minister against an initial refusal by the Controller. The same course followed in respect of NAD in respect of its site licence. The end result therefore is that Erf [...] holds a retail licence in respect of Erf 9[...] Extension 1 Township in Acornhoek (the site) and NAD holds the site licence.

[6] Pine Glow, upon learning that construction of a filling station on the site had commenced, approached the court for relief

upon motion. Firstly, Pine Glow applied for urgent relief interdicting the construction of the filling station. Secondly, for an order reviewing and setting aside the Minister’s decision to uphold Erf [...] and NAD’s appeal (which challenge was

abandoned) and against the Controller’s decision to grant the site- and retail licences subsequent to Erf [...] and NAD’s

appeal to the Minister of the Controller’s decision to initially refuse the licence applications.

[7] The urgent application was struck from the roll. The court dismissed the review application. It is against this judgment and order the appeal lies with leave of the court.

Proceedings in the court a quo

Relevant common cause facts

[8] The Erf [...] applied to the Controller to be issued a retail licence in terms of the Act. NAD applied to be issued with a site licence by the Controller in terms of the Act. Both these applications pertain to the site. These licences are referred to hereinafter to collectively as “the licences”.

[9] Pine Glow objected against the granting of the licences and on 9 November 2018, the Controller refused both licence applications.

[10] Erf [...] and NAD lodged an appeal against the refusal of the licences in terms of Section 12A of the Act to the Minister. Pine Glow opposed the appeal.

[11] The outcome of Erf [...] and NAD’s appeal to the Minister was communicated by the Minister on 10 December 2019 in a letter to Erf [...] and NAD’s attorneys. The letter reads:

‘1. I, the Minister of Mineral Resources and Energy, in terms of the provisions of Section 12A of the Petroleum Products Act, 1977 (Act No. 120 0f 1977) (as amended) (hereinafter referred to as “the Act”, considered the appeal against the decision of the Controller of Petroleum Products (hereinafter referred to as “the controller”) to refuse to grant your clients’ site and retail licences.

2. After careful consideration of all the facts and arguments presented before me, I hereby set aside the decision of the Controller to refuse the site and retail licence applications.

3. However, I am referring the site and retail licences back to the Controller for re-evaluation taking into consideration the information submitted and other documentation obtained during the appeal process.’

[12] On 10 December 2019, the Minister also wrote to the Controller as follows:

‘1. Find attached hereto, the outcome of the appellant's appeal against your decision to refuse the site and retail licence applications.

2. Kindly attend to re-evaluate the appellants licence applications within sixty (60) calendar days from date of receipt hereof taking into account the new information submitted in the appeal. This time period should be sufficient to enable the office of the Controller to conduct new site visit, which requires to be conducted.

3. In the appeal, it was of specific concern that petroleum volumes obtained from Total South Africa (Pty) Ltd in respect of sites located in Witbank (338 km from the proposed site) and Umhlanga Rocks (793 km from the proposed site) were found in the Controller’s file. The appellants have quite right [sic] raised the suspect as being of specific consequence to the integrity of the initial evaluation.

4. Additionally, there are numerous expert reports that have been provided that the Appellants are adamant were not considered by the Controller. It is not apparent from the Controller’s working sheets that these reports were sufficiently considered. The Appellants have submitted a further updated report during the appeal process. All of these reports must be properly considered in the re-valuation process.

5. Accordingly, this, and other aspects of raised in the appeal, have necessitated that this set of licence applications be re-evaluated.’

[13] On 5 February 2020, Pine Glow recorded that the Minister’s decision is unlawful because the Minister is required to decide the appeals and not empowered to refer the applications back to the Controller and furthermore recorded that the Controller was functus officio. The Minister contended that his decision was competent.

[14] On 26 November 2028 it came to Pine Glow’s knowledge that construction activities had commenced on the site. Pine Glow was

notified on 7 December 2020 by Erf [...] and NAD’s attorneys that the licences were issued by the Controller.

[15] It is against this background that Pine Glow approached the court for relief as set out above. The court dismissed the review application on 10 June 2022. It is against this decision that this appeal lies.

Pine Glow’s case

[16] Pine Glow relies on the provisions of the Act and PAJA for the review of the Controller’s decision to award the licences.

[17] As grounds for review of the Controller’s decision to award the licences, Pine Glow (having abandoned the challenge to the

Minister’s decision to direct the Controller to re-evaluate the applications), asserted as follows: the Controller is not authorised by section 12A of the Act or any other provision in the Act to re-evaluate applications previously finally decided by him; the Controller's decision to re-evaluate the applications in question and revisit and reverse his final refusal was influenced by an error of law, and the Controller's decision to re-evaluate and approve the applications in question was procedurally unfair.

[18] Pine Glow, in its “replying declaration”, refined its stance in the application when it set out as follows:[3]

‘5. This application turns on three crisp legal issues:

5.1 Was the Controller of Petroleum Products ("the Controller”) functus officio when he re-evaluated the licence applications of the respondents’ licence applications in terms of the Petroleum Products Act 120 of 1977 (“the PPA”)?

5.1.1 The applicant respectfully submits that he was and that his decision on re-valuation, consequently, stands to be reviewed and set aside;

5.1.2 the applicant further respectfully submits that if this honorable Court found the controller to have been functus officio, that would be the end of the matter.

5.2 If, however, the court were [sic] to hold that the controller was not functus officio, which is denied, two further questions arise:

5.2.1 Did the Controller conduct the re-evaluation process in a procedurally the fair manner in compliance with the mandatory prescripts of PAJA and the audi alteram partem rule? The applicant submit that he self-evidently did not.

5.2.2 Was the controller biased in the re-evaluation process? The applicant submits that the preferential treatment the Controller afforded the despondent shows unequivocally that he was.

6. Whether the respondents licence applications have any merit, is irrelevant to the questions this honourable court is seized with deciding……..’

Erf [...] and NAD’s case

[19] Erf [...] and NAD contended that: Section 2B of the Act provides for the licensing in the sense that the Controller must issue licences in accordance with the provisions of the Act; Section 2E(3) of the Act deals with the system for the allocation of licences. Applications for site and retail licences are further regulated and provided for under the Petroleum Products Site and Retail Licence Regulations (the Regulations) [4]; any decision by the controller to issue a licence, is an administrative decision that falls under the Ambit of PAJA; the appeal procedure provided for in the Act is designed to give an internal remedy to any person aggrieved by the decision taken by the Controller; the Minister's decision to set aside the controller's original decision constitutes an administrative

decision; the Controller's original decision to refuse the licences no longer exists; the Minister's decision to remit the matter to the Controller to consider the applications afresh with all the additional information obtained in the appeal process constitutes a further administrative decision; and, the Controller took a new decision based on new facts and new information, which was not before the Controller at the time the Controller took its original decision, therefore, the Controller did not merely reconsider his own decision.

[20] In addition, Erf [...] and NAD contended that Pine Glow has failed to exhaust its internal remedy to appeal the Controller’s decision to award the licences. For completeness sake, I recite Erf [...] and NAD’s views in this regard:[5]

‘59. I am once again advised that the applicant's review application is fatally flawed in this regard.

60. This follows, as the applicant was obliged to first exhaust its internal remedy before it could approach the Court for a review of decision.

61. Section 7(2)(a) of PAJA provides …

62. The Controller's original decision was set aside by the Minister.

63. The Minister indeed took an administrative decision. The Minister took a decision to set aside the Controller's original decision.

64. At this point in time, the Controller's original decision no longer existed.

65. The Minister then, subsequent to setting aside the Controller's decision, took a further decision and that was to remit the matter back to the Controller to consider the applications and fresh, with all the additional information obtained in the appeal process.

66. Thus, the Controller took a new decision, based on new facts and new information, which was not before the controller at the time the controller to its original decision. He did not merely reconsider his own decision.

67. The applicant [sic] aforesaid failure to appeal, is fatal to its review application.’

(Erf [...] and NAD’s underlining and emphasis).

Findings of the court a quo

[21] The court identified the issues to be considered as follows:[6]

‘19.1 To establish what the repercussions of Pine Glow not to challenge the decision of the Minister to uphold the appeal, set it aside and remit it to the controller for re-evaluation are, if any;

19.2 In terms of the PPA, does the Minister's referral of the matter back to the controller constitute a fresh decision by the Controller or is the decision of the Controller following his re-evaluation essentially his own or that of the Minister?

19.3 Whether or not Pine Glow has exhausted its internal remedies in terms of PPA which provides for an internal appeal;

19.4 The validity or irregularity of the decision taken by the Controller on re-evaluation;

19.5 Does the court have a remedial discretion regardless of a declaration of irregularity that it may find.’

[22] The court found that: the Minister was entitled to refer the matter back to the Controller and the latter was expected to assist

as requested and in doing so, the Controller was discharging his responsibilities set out in section 3(2)(a) of the Act; the Controller was not revisiting his own decision but was merely executing instructions of the Minister because the instruction to re-evaluate the licence applications emanated from the Minister and not the Controller; it might be that the controller was functus officio, however the Controller was simply discharging his duty of assisting the Minister as ordinarily it should be accepted that, without instructions from the Minister, the Controller would not have re-evaluated his decision; the Controller was not functus officio because the Controller was only fulfilling his duties as contemplated in section 3(2)(a) of the Act; Pine Glow only had one opportunity to appeal the matter to the Minister because the Controller’s decision to reassess the applications was part of the Minister's consideration of the appeal and therefore there was no internal remedy for Pine Glow on the Controller’s decision to re-evaluate and grant the licences; the Minister could not have been functus officio as the Minister had upheld the appeal; and, the decision to re-assess the applications was that of the Minister and not the Controller.

Pine Glow’s grounds of appeal

[23] Pine Glow’s grounds of appeal are:

‘1. The learned Judge erred in finding that: “The Controller could not have been functus officio because he made a decision only once and that is when he refused the licences”, when, as a matter of objective fact, the controller took two decisions;

2. The learned Judge erred in finding that the controller, having finally refused the applications in terms of the Petroleum Products Act, 120 of 1977 (“the PPA”), for site and retail licences (“the applications”) on 9 November 2018 was not functus officio when he thereafter reconsidered and approved the said applications.

3. The learned Judge erred in finding that the decision to approve the applications and grant licences to the 3rd and 4th respondents (“the respondents”) was made by the Minister and not the Controller. Insofar as the learned Judge was seized with considering the Minister's decision, he ought to have found that the Minister, having upheld the appeal, failed

to take a decision on whether to approve or refuse the applications.

4. The learned Judge erred in finding that the Minister, in remitting the applications to the Controller for reconsideration, was exercising his powers in terms of section 3(2)(a) to request assistance from the Controller. The assistance required from the Controller would be required to assist the Minister in taking a decision. What, in fact, transpired was that the approval decisions as contained in the letters dated 14 may 2019 was made and issued by the Controller in his capacity as the Controller of Petroleum Products appointed in terms of section 3(1)(a) of the PPA, and not by the Controller in a representative capacity on behalf of the Minister. The second decision was also made by the Controller, not the Minister.

5. The learned Judge erred in not finding that the re-valuation and approval of the applications by the Controller offended against the applicant’s Constitutional right to just administrative action.

6. The learned Judge erred in finding that the Minister, having upheld the appeal by the 3rd and 4th respondents and set the refusal decision aside, was empowered to remit the applications to the Controller for reconsideration.

7. The learned Judge erred in finding that, “... the Minister was and has always been at liberty to refer the applications back to the Controller for reconsideration”.

8. The learner judge erred in finding that “The Controller was simply discharging his duty of assisting the Minister”.

9. The learned Judge erred in finding that: “While the cases on functus officio echo and represent the current position of our law on when a party becomes functus officio, they are Not germane to the facts of this matter. as such, no reliance should be made on them”.

10. The learned judge erred in finding that: “ … Ordinarily the controller would not have reversed his decision because he was functus officio” and that the Controller’s decision to re-assess was part of the Minister's consideration of the appeal.

11. The learned Judge erred in finding that the Minister was empowered to order the Controller to re-evaluate their applications taking into account new information placed before the minister on appeal.

12. In the event that it is held that the Minister was empowered to remit the applications to the Controller for reconsideration, the learned Judge erred in not finding that the controller was required by Section 33 of the Constitution and provisions of the Promotion of Administrative Justice act, 3 of 200 [sic], to afford the applicant an opportunity to be heard before he decided to reconsider their applications and reverse his earlier decision.’

DISCUSSION

Legislation

[24] The provisions of the Act and PAJA stand central to the decision in this appeal. I proceed to set out the relevant provisions

of both Acts.

The Act

[25] The purpose of the Act is:

‘To provide for measures in the saving of petroleum products and an economy in the cost of distribution thereof, and for the maintenance and control of a price therefor, for the furnishing of certain information regarding petroleum products, and for the rendering of services of a particular kind, or services of a particular standard, in connection with petroleum products; to provide for the licensing of persons involved in the manufacturing and sale of certain petroleum products; to promote the transformation of the South African petroleum and liquid fuels industry; to provide for the promulgation of regulations relating to such licences; and to provide for matters incidental thereto.’

[26] The licencing requirements prescribed by the Act are provided for in section 2B of the Act and the Regulations. Section 2B of the

Act provides that the Controller of Petroleum Products must consider applications for licences in terms of the Act and must issue same in accordance with the provisions of the Act. The definition of “licence” in section 1 of the Act includes a site and retail licence. Section 2B, in relevant part, provides:

‘Licensing.—(1) The Controller of Petroleum Products must issue licences in accordance with the provisions of this Act.

(2) In considering the issuing of any licences in terms of this Act, the Controller of Petroleum Products shall give effect to the provisions of section 2C and the following objectives:

(a) promoting an efficient manufacturing, wholesaling and retailing

petroleum industry;

(b) facilitating an environment conducive to efficient and commercially

justifiable investment;

(c) the creation of employment opportunities and the development of small businesses in the petroleum sector;

(d) ensuring countrywide availability of petroleum products at

competitive prices; and

(e) promoting access to affordable petroleum products by low-income

consumers for household use.’

[27] The scope of the Regulations is confined to site and retail licences[7] and provides for issues such as: the lodging of licence applications[8], notice of an application for a licence; the acceptance of a licence application; the evaluation of licence applications[9] and the procedure for the issuing licences[10]. In all of these actions and decisions issues, only the Controller features. The Minister features nowhere in the licencing process.

[28] The “Minister” is defined in section 1 of the Act as the Minister of Minerals and Energy. The powers of the Minister are set out in section 2 of the Act. The Minister does not have the power to consider and issue licences in terms of the Act. Therefore, neither the Act nor the Regulations clothe anyone else but the Controller with the authority to consider licence applications and to issue same.

[29] Section 12A provides for appeals by any person affected by a decision the Controller to the Minister. The section reads:

‘Appeal.—(1) Any person directly affected by a decision of the Controller of Petroleum Products may, notwithstanding any other rights that such a person may have, appeal to the Minister against such decision.

(2) An appeal in terms of paragraph (a) shall be lodged within 60 days after such decision has been made known to the affected person and shall be accompanied by—

(a) a written explanation setting out the nature of the appeal;

(b) any documentary evidence upon which the appeal is based.

(3) The Minister shall consider the appeal, and shall give his or her decision thereon, together with written reasons therefor, within the period specified in the regulations.’

[30] A decision of the Controller to issue or refuse a site or retail licence application may be appealed to the Minister by any person affected by the decision.

PAJA

[31] The parties are in agreement that the Controller’s decision to issue or refuse a site and/or retail licence constitutes an

administrative action as contemplated in PAJA.[11]

[32] Section 3 of PAJA sets out the requirements of procedurally fair administrative action. The section provides:

‘Procedurally fair administrative action affecting any person.—(1) Administrative action which materially and adversely affects the rights or legitimate expectations of any person must be procedurally fair.

(2)(a) A fair administrative procedure depends on the circumstances of each case.

(b) In order to give effect to the right to procedurally fair administrative action, an administrator, subject to subsection (4), must give a person referred to in subsection (1)—

(i) adequate notice of the nature and purpose of the proposed administrative action;

(ii) a reasonable opportunity to make representations;

(iii) a clear statement of the administrative action;…’

[33] Section 7 of PAJA provides for the judicial review of an administrative action. Section 7 in relevant part provides:

‘Procedure for judicial review.—(1) Any proceedings for judicial review in terms of section 6 (1) must be instituted without unreasonable delay and not later than 180 days after the date—

(a) subject to subsection (2) (c), on which any proceedings instituted in terms of internal remedies as contemplated in subsection (2) (a) have been concluded; or

(b) …

(2) (a) Subject to paragraph (c), no court or tribunal shall review an administrative action in terms of this Act unless any internal remedy provided for in any other law has first been exhausted.

(b) Subject to paragraph (c), a court or tribunal must, if it is not satisfied that any internal remedy referred to in paragraph (a) has been exhausted, direct that the person concerned must first exhaust such remedy before instituting proceedings in a court or tribunal for judicial review in terms of this Act.

(c) A court or tribunal may, in exceptional circumstances and on application by the person concerned, exempt such person from the obligation to exhaust any internal remedy if the court or tribunal deems it in the interest of justice.’

[34] Of importance, in the context of this appeal, section 7 provides: that internal remedies provided for must first be concluded; what the court must do if it is not satisfied that an internal remedy has not been exhausted, and for an exemption from exhausting an internal remedy in the interest of justice.

The Controller’s decision to grant the licences

[35] The Controller granted Erf [...]’s retail licence and NAD’s site licence subsequent to the Minister’s instruction to re-evaluate the applications. The Minister’s instruction to the Controller was preceded by the Minister upholding the appeal. The Minister’s duty was done when the appeal was upheld because this was the only power the Minister had. For reasons

that are set out below, I am of the view that the lawfulness of the Minister’s decision consequent to the dismissal of the appeal to instruct the Controller to re-evaluate the licence applications need not to be decided.

[36] What needs to be resolved is whether the Controller’s decision to, re-evaluate Erf [...] and NAD’s licence applications and to approve same, constitute a separate administrative action from the Controller’s initial decision to refuse the licences.

[37] Having regard to the Controller’s power to issue or deny licence applications in terms of the Act, and his subsequent approval

of the licences constitutes administrative action no matter how it came about. In my view, the fact that the Minister instructed the Controller to re-evaluate the licence applications and that he obliged which then lead to the issuing of the licence applications is of no moment. The decision to grant the licences remains an administrative action as contemplated in PAJA.

[38] Pine Glow acknowledges that the decision to grant the licences constitutes a second and distinctive administrative action in its

first ground of appeal when it states that “… when, as a matter of objective fact, the Controller took two decisions.” This is further echoed in Pine Glow’s fourth ground of appeal where it states that: “…What, in fact, transpired was that the approval decisions as contained in the letters dated 14 may 2019 was made and issued by the Controller in his capacity as the Controller of Petroleum Products appointed in terms of section 3(1)(a) of the PPA, and not by the Controller in a representative capacity on behalf of the Minister. The second decision was also made by the Controller, not the Minister.”

[39] Pine Glow’s fifth ground of appeal is that the re-evaluation and approval of the applications by the Controller offended against Pine Glow’s Constitutional right to fair administrative action. By implication therefore, Pine Glow acknowledges that the Controller’s decision to grant the licences constituted administrative action and that it adversely affected its rights. To dispel any notion of doubt in this regard, Pine Glow’s amended notice of motion seeks to set aside the Controller’s decision to grant the licence applications.

[40] In addition, Pine Glow argues in its heads of argument as follows:[12]

‘It is evident that the decision to grant the site and retail licences was not the decision of the Minister, but was in fact the decision of the Controller.’

[41] Pine Glow further argued in the appeal that the Minister’s powers are constrained by section 12A of the Act and as such, in the absence of any specific provision giving the Minster the power to remit the matter to the Controller, such power does not assist. Ergo, the decision of the Controller to grant the licences is only the Controller’s and nobody else’s.

[42] Inasmuch as the Controller’s decision to grant the licences constitutes a separate and distinct administrative action affecting Pine Glow’s rights, Pine Glow was obliged to pursue its remedies under section 12A of the Act. See: Basson v Hugo and others [13]:

‘Therefore, an internal remedy must be exhausted prior to judicial review, unless the appellant can show exceptional circumstances to exempt him from this requirement (Koyabe & others v Minister for Home Affairs & others (Lawyers for Human Rights as amicus curiae) [2009] ZASCA 23; 2010 (4) SA 327 (CC) para 34; Nichol & another v Registrar of Pension Funds & others [2005] ZASCA 97; 2008 (1) 383 (SCA) para 15). What constitutes exceptional circumstances depends on the facts and circumstances of the case and the nature of the administrative action in issue (Koyabe supra para 39). Factors taken into account in deciding whether exceptional circumstances exist are whether the internal remedy is effective, available and adequate. An internal remedy is effective if it offers a prospect of success, and can be ‘objectively implemented, taking into account relevant principles and values of administrative justice present in the Constitution and our law’; and available if it can be pursued ‘without any obstruction, whether systemic or arising from unwarranted administrative conduct’ (Koyabe supra para 44). An internal remedy is adequate if it is capable of redressing the complaint (Koyabe supra paras 42, 43 and 45).’

[43] Pine Glow has failed to do so. In this regard, I with respect, part ways with the court when the court found that the Controller’s

decision to re-assess the applications was “…part of the Minister’s consideration of the appeal” and that: “In this sense Pine Glow only had one opportunity to appeal the matter to the Minister, which it has utilized.”[14] This finding disregards the clear difference between the Controller’s powers in respect of licence applications and that of the Minister as appeal authority as well as Pine Glow’s own view of the Controller’s decision to grant the licences being a second and separate administrative action.

[44] Pine Glow has not applied that the court exempt it from its obligation to exhaust its remedy under section 12A. An application to be exempted is compulsory. See: Member of the Executive Council for Local Government, Environmental Affairs and Development Planning, Western Cape and another v Plotz NO and another[15]:

‘[20] It is compulsory for the aggrieved party in all cases to exhaust the relevant internal remedies before approaching a court for review, unless exempted from doing so by way of a successful application under s 7(2)(c) PAJA. The person seeking exemption must satisfy the court, first that there are exceptional circumstances, and, second, that it is in the interest of justice that the exemption be given. (See Nichol & another v Registrar of Pension Funds & others 2008 (1) SA 383 (SCA) para 15; Dengetenge Holdings (Pty) Ltd v Southern Sphere Mining & Development Co Ltd & others 2014 (5) SA 138 (CC) para 115.)

[21] Section 7(2)(c) of PAJA postulates an application to the court by the aggrieved party for exemption from the obligation to exhaust any internal remedy. (See Dengetenge Holdings para 116.) The trust did not apply for exemption from the obligation to exhaust the internal remedy of appeal that was available to it in terms of s 43(2) of NEMA.’

[45] In its oral argument, Pine Glow argued before this court that there will be no use to appeal to the Minister because the Minister

has in any event remitted the matter to the Controller. Yet, Pine Glow argues that the Controller has not granted it an opportunity to be heard before the Controller granted the licences. This is indeed correct if regard is had to the facts. The Controller re-evaluated

the licences without informing Pine Glow of its intention to do so. The Controller had erred. The Controller ought to have informed Pine Glow that it was proceeding to re-assess the licence applications and should have invited Pine Glow to make representations and consider same before the Controller issued the licences. This obligation stems from section 3 of PAJA.

[46] The Controller’s failure to give Pine Glow adequate notice before re-evaluating the licence applications, a reasonable opportunity to make representations and to inform Pine Glow that it might, upon reconsideration following the Minister’s remittance grant the licence applications, tainted the Controller’s decision to grant the licences and would have constituted a proper ground of appeal to the Minister of the Controller’s decision.

[47] Inasmuch as there may be force in Pine Glow’s contention that it would be an exercise in futility for the parties to repeatedly appeal decisions to the Minister related to the same set of applications, the Act and Regulation provides regarding licencing what it does. In my view there may be a laguna in circumstances as in this matter where an appeal against a refusal by the Controller to issue a licence is upheld. The Act and Regulation are silent on what must happen next. It cannot follow that the licence application is then automatically granted because that would affect the rights of other interested parties who are not parties to the appeal. During the course of the consideration of the appeal neither the Act nor the Regulation give affected parties the right to be heard. The only opportunity affected parties are given a right to be heard is when a licence application is being considered by the Controller. This is an issue for the Legislature to resolve and not for the court to do so. Without deciding, I say that a fresh application should be lodged if an appeal against the refusal of a licence is upheld.

[48] I the premises, I find that Pine Glow’s application was premature in light of Pine Glow’s failure to exhaust its internal remedy in terms of section 12A of the Act and in the absence of an application by Pine Glow to be exempted from exhausting its internal remedy, the question of whether it would be in the interests of justice for this court to exempt Pine Glow does not arise.

[49] In light of the aforesaid finding it is not necessary to consider the issues that were identified by Pine Glow to be considered in this appeal. These include: whether the controller was functus officio and biased[16].

[50] In the event that I am wrong in finding that the Controller’s second decision to grant the licences constituted administrative action which could be challenged through the provisions of section 12A, I proceed to deal tersely with the functus officio and alleged bias issues.

The functus officio issue

[51] Whether the Controller was functus officio when he, upon the Minister’s instruction, re-evaluated and granted the licences must be considered through the prism of the mechanism of the licencing system as prescribed in the Act and the Regulations. I have already said that the Controller plays a pivotal role and is the only person empowered to receive licence applications, to consider and issue same. I turn to the Regulations.

[52] Licence applications must be submitted to the Controller with Forms that are prescribed by Regulations 3 and 5.[17] In terms of Regulation 4[18], applications for a site licence must be published by the site licence applicant. Subregulation 4(2)(b) provides that a licence application number is issued by the Controller. This presupposes that each licence application is separate and distinct for it is given an application number. It is common cause that Erf [...] and NAD’s licence applications were issued with numbers.[19] Pine Glow, expresses itself as follows over this issue:[20]

‘24. The Controller finally refused the respondents licence applications under the reference allocated to them by the department on 9 November 2019 on which he became functus officio.

25. Any “new” decision by the Controller would be required to be taken in respect of new licence applications to which different reference numbers were allocated and which have been advertised for public notice and further dealt with as required by the PPA regulations.

26. The Controller is not empowered by the PPA to reconsider a decision once made.’

[53] The court found that because the Controller was executing the Minister’s instruction in respect of the licence applications he was not functus officio. I respectfully have to disagree with the court’s finding in light of the mechanism regulating licence applications as set out above. In addition, although the Controller may assist the Minister in the execution of the Minister’s powers and performance of the Minister’s functions under the Act, the Minister has no power in terms of the Act to accept, consider and issue licence applications. That power and function lies exclusively with the Controller. The Minister has no power in terms of the Ac to substitute the Controller’s decision with his own. By remitting the licence applications back to the Controller and not issuing same shows that the Minister was aware of his own limitations in this regard.

[54] In De Wet and Another v Khammissa and Others[21] the functus officio principle was succinctly put as follows:

‘Broadly stated, functus officio is a doctrine in terms of which decisions of officials are deemed to be final and binding once they are made. Thus, the question as to whether the Master was functus officio, calls for a consideration whether the first decision was final. Hoexter, explains that finality is a point arrived at when the

decision is published, announced or otherwise conveyed to those affected by it, ie it must have passed into the public domain in some manner.’ (Footnotes omitted).

[55] The Controller’s first decision not to approve the licences was final and binding. It cannot be otherwise because if it was not a final decision, no appeal would lie to the Minister.

Alleged bias

[56] Pine Glow contends in this appeal that the Controller was bias when he reconsidered the licence applications. However, alleged bias on the Controller’s part was not one of Pine Glow’s grounds of review, either in its “Founding Declaration” or in its “Replying Declaration”. The issue of the Controller’s alleged bias finds its way into Pine Glow’s heads of argument where it is argued that: “… the institutional bias against objectors such as Pine Glow is evidenced by the Third and Fourth Respondents in their supplementary answering affidavit…” This is when Erf [...] and NAD discloses that the Controller had conducted a site visit to which Pine Glow (as an objector) was not requested to meet with the official conducting the site visit.[22] In circumstance where Pine Glow did not rely on the Controller’s alleged bias in its papers, same needs no further consideration. In any event, Pine Glow could have raised this issue as ground of appeal to the Minister of the Controller’s decision to re-evaluate and grant the licences.

CONCLUSION

[57] Despite the finding that the Controller had acted in a procedurally unfair manner in its reconsideration and granting of the licences, the appeal cannot succeed because the application to set aside the Controller’s decision to re-evaluate and issue the licences was premature as Pine Glow has failed to exhausting its internal remedy.

[58] There is no reason why costs should not follow the result.

[59] In the premises, I propose the following order:

(a) The appeal is dismissed.

(b) The appellant is ordered to pay the third and fourth respondents’ costs.

Roelofse AJ

Acting Judge of the High Court

I agree and it is so ordered.

Vukeya J

Judge of the High Court

Greyling-Coetzer AJ

Acting Judge of the High Court

DATE OF HEARING:12 MAY 2023 DATE OF JUDGMENT:24 AUGUST 2023

APPEARANCES

FOR THE APPELLANT: ADV MC ERASMUS SC INSTRUCTED BY WDT ATTORNEYS INC FOR THE THIRD AND FOURTH RESPONDENTS: ADV JA VENTER INSTRUCTED BY A. KOCK & ASSOCIATES INC

[1] The other respondents are: The Minister of Energy (First Respondent), the Controller of Petroleum Products (Second Respondent), Royale Energy (Pty) Ltd (Fifth Respondent), Royale Energy Group (Pty) Ltd (Sixth Respondent), Royale Energy Management Services (Pty) Ltd (Seventh Respondent), Royale Energy Olifantsfontein (Pty) Ltd (Eighth Respondent), Viva Oil (Pty) Ltd (Ninth Respondent) and Tokivect (Pty) Ltd (Tenth Respondent). The Minister the Controller and the fifth to tenth respondents did not deliver notices of intention to oppose the application nor did they file any papers.

[2] Pine Glow has abandoned its challenge to the Minister’s decision amid stride.

[3] Record at pages 1107 and 1108.

[4] GNR.286 of 27 March 2006.

[5] Pages 89 and 90 of the record.

[6] Para. 19 of the judgment at page 1226.

[7] Regulation 2.

[8] Regulations 3 and 15.

[9] Regulations 6 and 18.

[10] Regulations 7 and 19.

[11] The definition of administrative action in PAJA, in relevant part reads: ‘“administrative action” means any decision taken, or any failure to take a decision, by— (a) an organ of state, when— (i) exercising a power in terms of the Constitution or a provincial constitution; or (ii) exercising a public power or performing a public function in terms of any legislation; or (b) a natural or juristic person, other than an organ of state, when exercising a public power or performing a public function in terms of an empowering provision, which adversely affects the rights of any person and which has a direct, external legal effect, but does not include— (aa) ……’

[11] The definition of administrative action in PAJA, in relevant part reads:

‘“administrative action” means any decision taken, or any failure to take a decision, by—

(a) an organ of state, when—

(i) exercising a power in terms of the Constitution or a provincial constitution; or

(ii) exercising a public power or performing a public function in terms of any legislation; or

(b) a natural or juristic person, other than an organ of state, when exercising a public power or performing a public function in terms of an empowering provision, which adversely affects the rights of any person and which has a direct, external legal effect, but does not include—

(aa) ……’

[12] Para. 24.3 of Pine Glow’s heads of argument.

[13] [2018] 1 All SA 621 (SCA) at para. 12.

[14] Para. 38 of the judgment.

[15] [2018] JOL 39535 (SCA) at paras. 20 and 21.

[16] Paras. 3.1 and 3.2 of Pine Glow’s heads of argument.

[17] Regulation 3 reads: ‘3. Lodging of site licence application.—(1) An applicant for a site licence must— (a) complete an application form contained in Annexure A; and (b) lodge the application with the Controller together with the documents specified- (i) in the case of an applicant in respect of whom section 2D of the Act is not applicable, in regulation 13 (1); or (ii) in the case of an applicant in respect of whom section 2D of the Act is applicable, in regulation 13 (2). (2) The application contemplated in subregulation (1) must be lodged together with an application for a corresponding retail licence. (3) An applicant contemplated in sub regulation (1) in respect of whom section 2D of the Act is not applicable may not commence with construction on a site until the Controller has issued a site licence.’ Regulation 5 reads: ‘5. Acceptance of site licence application.—(1) Before accepting a site licence application, the Controller must be satisfied that— (a) a corresponding valid retail licence application has been lodged for that site; (b) the applicant- (i) is the owner of the site; (ii) in the case of— (aa) publicly owned land, has the written permission of the owner; or (bb) an applicant in respect of whom section 2D of the Act is applicable, holds the site; (c) the application form has been completed in full; and (d) all the documents specified in regulation 3 (b) have been submitted with the application form.’

[17] Regulation 3 reads:

‘3. Lodging of site licence application.—(1) An applicant for a site licence must—

(a) complete an application form contained in Annexure A; and

(b) lodge the application with the Controller together with the documents specified-

(i) in the case of an applicant in respect of whom section 2D of the Act is not applicable, in regulation 13 (1); or

(ii) in the case of an applicant in respect of whom section 2D of the Act is applicable, in regulation 13 (2).

(2) The application contemplated in subregulation (1) must be lodged together with an application for a corresponding retail licence.

(3) An applicant contemplated in sub regulation (1) in respect of whom section 2D of the Act is not applicable may not commence with construction on a site until the Controller has issued a site licence.’

Regulation 5 reads:

‘5. Acceptance of site licence application.—(1) Before accepting a site licence application, the Controller must be satisfied that—

(a) a corresponding valid retail licence application has been lodged for that site;

(b) the applicant-

(i) is the owner of the site;

(ii) in the case of—

(aa) publicly owned land, has the written permission of the owner; or

(bb) an applicant in respect of whom section 2D of the Act is applicable, holds the site;

(c) the application form has been completed in full; and

(d) all the documents specified in regulation 3 (b) have been submitted with the application form.’

[18] Regulation 4 reads: ‘4. Notice of application for site licence.—(1) When an application for a site licence contemplated in regulation 3 is accepted, an applicant in respect of whom section 2D of the Act is not applicable, must have a notice of the application published in a prominent manner, in at least two of the most popular newspapers circulating in the area of the proposed activity in two official languages, one of which must be English. (2) The notice contemplated in sub regulation (1) must state— (a) the name of the applicant; (b) the application number issued by the Controller upon acceptance of the application; (c) the purpose of the application; (d) the place where the application will be available for inspection by any member of the public; (e) the period within which any objection to the issuing of the licence may be lodged with the Controller; and ( f ) the address of the Controller where objections may be lodged. (3) The place contemplated in sub regulation (2) (d) must be the physical address of the Controller's office where the application was lodged. (4) The period contemplated in sub regulation (2) (e) must be at least 20 working days from the date of publication of the notice. (5) Proof of the publication of the notice of application contemplated in subregulation (1) must be submitted to the Controller.’

[18] Regulation 4 reads:

‘4. Notice of application for site licence.—(1) When an application for a site licence contemplated in regulation 3 is accepted, an applicant in respect of whom section 2D of the Act is not applicable, must have a notice of the application published in a prominent manner, in at least two of the most popular newspapers circulating in the area of the proposed activity in two official languages, one of which must be English.

(2) The notice contemplated in sub regulation (1) must state—

(a) the name of the applicant;

(b) the application number issued by the Controller upon acceptance of the application;

(c) the purpose of the application;

(d) the place where the application will be available for inspection by any member of the public;

(e) the period within which any objection to the issuing of the licence may be lodged with the Controller; and

( f ) the address of the Controller where objections may be lodged.

(3) The place contemplated in sub regulation (2) (d) must be the physical address of the Controller's office where the application was lodged.

(4) The period contemplated in sub regulation (2) (e) must be at least 20 working days from the date of publication of the notice.

(5) Proof of the publication of the notice of application contemplated in subregulation (1) must be submitted to the Controller.’

[19] In the case of ERF 6’s application, was allocated licence number: G[...]was allocated and in respect of NAD’s application, was allocated licence number: G[...].

[20] Pine Glow’s “Replying Declaration” at page 504 of the record.

[21] [1] (358/2020) [2021] ZASCA 70 (4 June 2021) at para. 15.

[22] Page 29 of Pine Glow’s heads of argument at page 29.