Quebos Investments (Pty) Ltd v Camelot Holdings CC and Another (67081/2014) [2015] ZAGPPHC 1022 (3 November 2015)

IN THE HIGH COURT OF SOUTH AFRICA

[GAUTENG DIVISION, PRETORIA]

DATE: 3/11/2015

CASE NUMBER: 67081/2014

REPORTABLE

NOT OF INTEREST TO OTHER JUDGES

In the matter between :

QUEBOS INVESTMENTS {PTY) LTD

APPLICANT

and

CAMELOT HOLDINGS CC

FIRST RESPONDENT

LOUIS WILLIAM VAN LELYVELD

SECOND RESPONDENT

JUDGMENT ON THE APPLICATION FOR LEAVE TO APPEAL

AJ LOUW AJ

[1] The First and Second Respondents apply for leave to appeal against the whole of my judgment of the 4th September 2015. I will continue to refer to Camelot Holdings CC as First Respondent and to Louis William van Lelyveld as Second Respondent or collectively to them as "the Respondents" although they are the Applicants for leave to appeal and will accordingly also continue to refer to Quebos Investments (Pty) Ltd as the Applicant.

[2] Both parties were in agreement that if leave to appeal is to be granted, such leave to appeal must be to the Supreme Court of Appeal. I agree. The question however is whether leave to appeal should be granted.

[3] At the inception of the argument, Mr Sawas handed up a judgment of Janse van Nieuwenhuizen, J in the matter of CWA Snyders NO as Trustee of Louis Snyders Familietrust v Louistef (Pty) Ltd, First Respondent; the Controller of Petroleum Products, Second Respondent; and MacRobert Incorporated, Third Respondent in this Court under case number 56178/2014. In that matter the provisions of the Petroleum Products Act 120 of 1977 are discussed by Van Nieuwenhuizen, J. ln that matter Mr Savvas appeared for the Applicant (the lessor) against the licensee and lessee of a petroleum fuel retailing business. Essentially in that matter Mr Sawas argued the case of the lessor. In that matter the applicant entered into a purported agreement of sale of a site licence as defined in the Petroleum Products Act 120 of 1977 (hereinfurther referred to as "the Petroleum Products Act"). Thereafter the applicant in that matter instituted the proceedings upon which Van Nieuwenhuizen J adjudicated. In that dispute the applicant alleged that the purported agreement of sale of the site licence was invalid, null and void and unenforceable because a site licence is not a res capable of being sold. After a discussion of the provisions of the Petroleum Products Act and the regulations thereunder as well as the law of sale, Van Nieuwenhuizen, J came to the conclusion that the sale agreement was indeed null and void and granted such a declaratory order with ancillary relief. Mr Savvas informed me that Van Nieuwenhuizen, J granted leave to appeal against that judgment. I do not know what the grounds are upon which leave to appeal was granted. However, insofar as the nature of a licence is concerned, the law is clear from the judgments of Aquatur (Pty) Ltd v Sacks and Others 1989 (1) SA 56 (A) at 64H - 65A and A-Team Drankwinkel BK en 'n Ander v Botha en 'n Ander NNO 1994 (1) SA 1 (AD) at 11E - H and 140 - 15G. There is no reason to conclude that the retail licence of the First Respondent is any different in nature. That is also the conclusion of Van Nieuwenhuizen, J in the CWA Snyders NO-judgment.

[4] The main thrust of Mr Savvas' argument was that the Petroleum Products Act brought about a change to the common law. He argued that the Respondents are in a different and better position than the applicant for leave to appeal in the matter of Everfresh Market Virginia v Shoprite Checkers 2012 (1) SA 256 (CC) because the respondents in this matter indeed set forth their case sufficiently clearly to enable a consideration of the question of bona tides in the law of contract. In the Everfresh-matter the contract of lease contained an express written term that the lessee had the right to renew the lease upon the same terms and

conditions subject thereto that "the rentals for the renewal period shall be agreed upon between the Lessor and the Lessee at the time". In that matter Shoprite contended that it was not obliged to enter into any negotiations with Everfresh and that Everfresh was in unlawful occupation. The argument of Everfresh was that Shoprite at the least was obliged to make a bona fide attempt to agree on the rent for the renewal period. It also contended that the right to evict does not accrue unless Shoprite negotiated bona fide.

[5] According to our law an option to renew a lease on terms to be agreed is unenforceable. See Everfresh at par 10 on p261C.

[6] In Everfresh-supra the majority of the Constitutional Court found that good faith is a matter of considerable importance in our contract law and the

question whether the spirit, purport and objects of the Constitution require courts to encourage good faith in contractual dealings and whether our Constitution insists that good faith requirements are enforceable should be determined sooner rather than later.

See: par 22 at p264D – F.

[7] In his minority judgment Moseneke DCJ in paragraph 71 referred to a number of interlinking constitutional values which would inform a development of the Common Law. He proceeded to say the following: "Indeed it is highly desirable and in fact necessary to infuse the law of contract with constitutional values, including values of ubuntu, which inspire much of our constitutional compact. On a number of occasions in the past this court has had regard to the meaning and content of the concept of ubuntu. It emphasises the communal nature of society and 'carries in it the ideas of humaneness, social justice and fairness and envelopes 'the key values of group solidarity, compassion, respect, human dignity, conformity to basic norms and collective unity."' ( Everfresh par 71 at p2761 - 277A.

[8] Mr Savvas accordingly argues that there is a reasonable prospect that a court of appeal could look at the facts of this matter differently and come to a different conclusion. In essence his argument is that a lessor in the position of the Applicant cannot refuse to renew a lease agreement without a good reason.

[9] Mr Sawas argued that a lease in perpetuity is possible and there is in any event the cases where a tacit relocation of a lease take place and accordingly he submitted that the idea of a "rolling over" of a lease is not unusual.

[10] Mr Sawas conceded that there is no protection at common law against the eviction of a lessee when a lease expires. He argued that the amendment to the Petroleum Products Act with its system of licences solves the problem for a lessee of a petrol station (whatever the position may be with other leases). He further argued that an eviction of a lessee who complied with his contractual obligations is not to the benefit of the lessor. The principle ought to be that the lessor cannot refuse to renew the lease without a good reason. He then further argued that the common law must be developed in the light of Section 39 of the Constitution.

[11] I considered the arguments of Mr Savvas and consulted the authorities he referred to and again considered the judgments of Bashall AJ and Matthee AJ in respectively the matters of Engen Petroleum Ltd v Gundu Service Station and Two Others case number 16333/2012 (South Gauteng, Johannesburg), and Engen Petroleum Ltd v Mighty Solutions CC tla Orlando Service Station case number 20344/2013 (Gauteng Local Division, Johannesburg) and cannot fault those judgements. Essentially my judgment was also based upon the reasoning set forth in the abovementioned two judgments.

[12] Having regard to the question of bona fides and the obligation to at least negotiate as referred to in the Everfresh-judgment , I find that the facts of Everfresh and the facts of this matter differ. In the Everfresh-matter there was an obligation in the agreement of lease to negotiate. In this case no such term exists and accordingly there is nothing to take the matter out of the realm of the usual position of a lessee vis-a-vis the lessor. The lease agreement terminated and the lessor is entitled to the return of his property.

[13] I again find that the provisions of the Petroleum Products Act and the regulations thereunder do not purport, even by implication, to change the law in the fundamental respects that Mr Savvas' arguments

would require. Ifind that there is no prospect that another court could come to a different conclusion in this regard.

[14] It is apposite to point out that the findings of the Supreme Court of Appeal in Brisley v Drotskv 2002 (4) SA (1) at par 22 - 24 still is good law. The general principle that a court cannot make a contract for parties is also still good law.

[15] In the circumstances of this case there is no obligation on the Applicant to negotiate with the Respondents in terms of any existing or previous agreement of lease.

[16] Insofar as I was referred to the judgment of Van Nieuwenhuizen, J, that judgment is authority against the arguments raised in the application for leave to appeal.

[17] In the oral argument on the application for leave to appeal the thrust of the oral argument dealt with paragraphs 3, 7, 8, 10, 11, 12, 16, 17 and 18 of the application for leave to appeal. It dealt with what Mr Savvas called the change in the common law that Mr Savvas argues for. With regard to the other grounds of appeal I hereunder set forth my views on the contents of the written application for leave to appeal.

[18] With regard to paragraph 1 of the application for leave to appeal I indeed referred to the retail licence of the First Respondent as "a site retail licence". I raised this issue with the parties during the argument and neither Mr Sawas nor Mr Terblanche made any submissions that indicate that this reference to the licence of the First Respondent creates any basis for a possible successful appeal. In my view nothing turns on the reference to a "site retail licence holder" although the correct name of the licence of the First Respondent indeed is a retail licence.

[19] Paragraph 2 of the application for leave to appeal incorrectly assumes that paragraph 12 of the judgment is a preface to dealing

with the nature of the First Respondent's licence. Paragraphs 13 and 14 deal with the position of the owner of the leased premises, i.e. the Applicant.

[20] With regard to ground 4 I found and remain convinced that the Petroleum Products Act did not create possessory rights in favour of the retail licence holder such as the First Respondent.

[21] As regards grounds 5 and 6 of the application for leave to appeal no oral argument was directed to me and I do not find any reason to doubt the correctness of the judgement in this regard.

[22] As regards paragraph 9 of the application for leave to appeal I indeed referred thereto that the Applicant was in unlawful occupation since 2002. This is not correct as the First Respondent remained in occupation with the knowledge and consent of the Applicant as clearly appears from the founding affidavit. However, nothing turns on this point as it is common cause and the matter was also argued before me on the basis that all the common law grounds for the granting of a rei vindicatio exists if I do not find in favour of the Respondents on basis of the defences raised in the opposing affidavit. No further argument was directed in this regard and I cannot find any reason to grant leave to appeal on grounds of the contents of paragraph 9 of the application for leave to appeal.

[23] The grounds of appeal raised in paragraphs 12, 13 and 14 of the application for leave to appeal were dealt with in paragraphs 16 to 19 of the judgment. No further argument was directed to me during the application for leave to appeal in this regard and I see no reasonable prospect of another court finding differently.

[24] I can accordingly not find that there are reasonable prospects of success on appeal.

[25] The order is as follows:

The application for leave to appeal is dismissed with costs.

________________________

AJ LOUW, AJ