IN THE CONSTITUTIONAL COURT OF SOUTH AFRICA
CC CASE NO: _________
SCA CASE NO: 20287/14 SGLD (SGHC) CASE NO: 20344/13 In the matter between:
MIGHTY SOLUTIONS CC T/A ORLANDO SERVICE STATION
Appellant
and
ENGEN PETROLEUM LTD First Respondent
CONTROLLER OF PETROLEUM PRODUCTS Second Respondent
AFFIDAVIT IN SUPPORT OF APPLICATION FOR LEAVE TO APPEAL
I, the undersigned,
MIGHTY MWALE
do hereby state under oath that:
1. I am the sole member of the appellant. I am authorised and entitled to depose to this affidavit and to bring this application on behalf of the appellant.
2. The facts herein are true and correct, and such facts fall within my personal knowledge unless the contrary is evident from the context hereof.
3. Where make statements regarding the law I do so based on advice received from the legal representatives of the appellant.
PARTIES:
4. The parties to this application for leave to appeal are as cited in the application in the court a quo and in order not to burden these papers I do not repeat such citations herein. The:
4.1. appellant herein was the first respondent in the court a quo;
4.2. the first respondent herein (“Engen”)was the applicant in the court a quo; and
4.3. the second respondent herein was the second respondent in the court a quo.
PURPOSE OF THIS APPLICATION:
5. This is an application for leave to appeal to the Constitutional Court against the whole of
the judgment and order of His Lordship Mr Justice Matthee (AJ) handed down on 28 March 2014. In this regard:
5.1. I attach hereto the judgment and order of the court a quo marked “A”;
5.2. The court a quo refused the appellant’s application for leave to appeal the judgment and order;
5.3. Application for leave to appeal was duly made to the Supreme Court of Appeal under case number 20287/14. On Wednesday 19 November 2014, the Supreme Court of Appeal dismissed the application for leave to appeal with costs. The registrar of the Supreme Court of Appeal failed to inform the attorneys of record of the appellant of this order and it only came to my attention on Friday 21 November 2014 when the sheriff of the Court arrived to execute the order and was only e-mailed to the attorney of record of the appellant today. I pause to state that such order has not yet been fully executed. The order refusing leave to appeal to the Supreme Court of Appeal is attached hereto marked “B” - (this was e-mailed to my attorney of record this morning, and has never been served on me).
6. Before setting out the appellant’s submissions herein, I point out that in case number CCT134/13, the appellant herein, together with a number of other petrol station owners, sought direct access to the Constitutional Court in matters concerning the fuel retailing industry. At that time this Court held that inter alia: “…the application should be dismissed as it is not in the interests of justice to hear it at this stage or to grant the applicants direct access.” [my underlining]. I attach a copy of this order hereto marked “C”. I respectfully state that pursuant to the Supreme Court of Appeal refusing leave to appeal it is now in the interest of justice to hear the present application for leave to appeal in a matter that raises certain fundamental constitutional issues. The application under CCT134/13 shall be filed together with the present application for leave to appeal and the appellant relies on those documents also in seeking leave to appeal to this Court.
INTRODUCTORY SUBMISSIONS:
7. I am advised that it is trite that two questions must be answered when leave to appeal is sought in this Court. The first relates to the jurisdiction of the Court and the second, once a constitutional issue has been established,1 is whether the interests of justice warrant the granting of leave to appeal.
8. I respectfully state that there can be no doubt that this case raises important constitutional issues of public interest. Inter alia, the right to freedom of trade, occupation and profession, property rights, and the principle of legality are implicated. In addition, the negative obligations of a juristic person in terms of the Constitution not to impair rights in the Bill of Rights, and of a Court to develop the common law to give effect to the rights of persons and entities that hold retailers’ licences, require examination.
9. I respectfully state that given the important constitutional issues at stake and the impact of the eviction order made by the High Court on the rights of the appellant, and all holders of retailers’ licences similarly placed to the appellant, the interests of justice warrant the granting of leave to appeal by this Court.
10. In the judgment of the Constitutional Court in the case of Governing Body of Juma Musjid Primary School and Others v Ahmed Asruff Essay N.O.and Others,2 the question of
1Section 167(3)(b) of the Constitution provides that the Court “may decide only constitutional matters, and issues connected with decisions on constitutional matters”
2 2011 (8) BCLR 761 (CC)
eviction in relation to a school arose. The Constitutional Court was alive to the question whether the common law remedy of rei vindicatio ought to be developed in circumstances where learners’ right to a basic education was likely not to be given effect to as a result of an eviction. By analogy, in the present matter, as with many similar matters, the rights of the appellant are directly infringed by the order sought and obtained in the court a quo. In casu, however, the rights of the appellant that have been infringed are to be weighed against the “rights” of a non-owner of immovable property.
11. Further argument shall be addressed with reference to the facts of the abovementioned case. I respectfully state that application for leave to appeal ought to be granted.
BACKGROUND FACTS:
12. Engen sued for inter alia the eviction of the appellant from a fuel filling station located at the corner of the Soweto Highway and Mooki Street, Orlando East, Soweto (“the premises”). Engen sued for such eviction of the appellant on the grounds that the sublease agreement between the appellant and Engen had been cancelled and/or had come to an end. It is relevant that the Engen is not the registered owner of the premises, and the case involves a non-owner of immovable property suing an entity with rights in respect of such property.
13. As stated, the land on which the filling station is located is not owned by Engen, and Engen’s alleged possessory rights stem from an alleged lease agreement of the property between Engen and the registered owner of the property. Despite demand, Engen failed
and/or refused to provide a copy of such alleged lease agreement.3The appellant is the holder of the retail license in respect of the premises and is the only entity entitled to trade in petroleum products from the premises. The present appeal against the order of eviction accordingly impacts on the issue of the principle of legality.
14. As far as the further issues of a constitutional nature are concerned, I stated in the answering affidavit in the court a quo inter alia that:
14.1. The [appellant] is duly licensed by the Republic of South Africa represented by [the Controller of Petroleum Products] in terms of and in accordance with the [Petroleum Products Act, 120 of 1977]:
14.1.1. As the only person – to the exclusion entirely of any other person in the Republic – who may conduct retail activity in the sale of petroleum products at the location in question here.
14.1.2. A copy of the [appellant’s] licensed certificate [was] attached [to the answering affidavit] as Annexure AA1.
14.1.3. By reason [of] the rights vested in the [appellant]in accordance with the said retail license, which is extant, and which (a) has not been and will not be surrendered by the [appellant]; (b) has not been cancelled by the [Controller of Petroleum Products] (there being no grounds for the [Controller of Petroleum
3The negative sanction of rule 35(12) was not considered by the court a quo at all.
Products] so to do) [Engen] has no legal standing, no legal capacity and no legal rights to any of the relief claimed in the Notice of Motion.
14.1.4. [The appellant’s] business and rights to business are therefore not ‘unlawful’.
14.1.5. Moreover, [appellant] needs neither [Engen’s] consent nor approval in order to conduct retail activity in the sale of petroleum products from the location in question and [Engen] has no right, legal standing or legal capacity in fact or in law to impugn, attack or assail the [appellant’s] right to conduct retail business from the location in question.
[see: paragraph 6 of the answering affidavit]
14.1.6. The appellant further raised the issue that since the inception of the Petroleum Products Amendment Act, Act 58 of 2003 (“PPAA”) on 17 March 2006 and by reason thereof and in particular the issuance of licenses thereunder, the occupation by any retailer of land and premises from which retail operations and petroleum products were being conducted derived directly, ipso iure, from the owner of the land being used for retail operations. [Appellant’s] occupation of the land and premises used for retail purposes derives from the land owner – not from [Engen]. [Engen] is not and never has been the owner of the land in question and the land is now part of the deceased estate of the late owner. Any agreement, arrangement, understanding, scheme or devise with whomsoever contracted and how so ever constituted which holds or seeks to grant to any person other than the licensed retailer [namely the appellant] any possessory
rights over a retail site, is null and void, is of no force and effect, is illegal and is unconstitutional.
[paragraph 8 of the answering affidavit]
14.1.7. In paragraph 11.4 of the answering affidavit the appellant denied that Engen had any lease rights from the owner of the land and pointed out that even if it did have such lease rights, such lease would be illegal and null and void in that Engen did not have any rights, legal standing, or legal capacity in the retail sector or in any part, section or aspect thereof. The appellant pointed out further that the license rights held by a retailer [namely the appellant] are, moreover, separately reinforced and protected by sections 13, 22 and 25 of the Bill of Rights and cannot be violated by any private agreement of any kind by whomsoever contracted, whether registered or unregistered, and any infraction of such rights is illegal both in terms of the Petroleum Products Act, 1977, as amended, and the Competition Act.
14.1.8. In paragraph 20 of the answering the appellant made the point that [Engen] had no right to be on the premises save and as permitted by the [appellant]. [In this regard, it is common cause that the appellant has the retail license in respect of the premises. Accordingly, any order giving possession of the premises to Engen and/or any other person ought to have been found to be unlawful.]
14.1.9. In paragraph 24 of the answering affidavit, the appellant incorporated the affidavit in terms of which the appellant sought a postponement for the filing of
the answering affidavit. In that affidavit the state of the law as set out in the annexure to the affidavit comprising of the matter that had been tabled in the Constitutional Court was incorporated into the answering affidavit. This is the same application filed under CCT134/13, a copy of which is filed together with the present application for leave to appeal and incorporated herein.
15. I respectfully state that it is evident from the judgment of the court a quo that Engen sought an order in terms of paragraphs 1 and 6 of the notice of motion (i.e. for eviction and costs only). I respectfully state further that evident from the judgment also is that the court a quo did not deal with all of the constitutional issues raised in the answering affidavit, read together with the affidavit filed under CCT134/13.
16. The following constitutional issues arise for determination inter alia:
16.1. Whether the common law rights (in respect of the law of lease) of a non-owner of immovable property, (which the appellant disputed), ought to trump the possessory rights of a licensed retailer (thereby infringing the section 25 rights - of the Bill of Rights - of the appellant).
16.2. Whether the eviction of the appellant constitutes an arbitrary deprivation of property and goodwill, and/or infringed the right to freedom of trade, occupation and profession.
16.3. Whether the order sought and the relief granted by the court a quo infringes the principle of legality within the framework of the relevant legislation set out in the affidavit under CCT 134/13.
16.4. Whether the order sought and the judgment granted results in the deprivation of the appellant of its retail license right which attaches to the premises and to the appellant.
16.5. Whether Engen may lawfully seek the relief sought, as non-owner of the immovable property, in circumstances where this deprives the appellant of the rights set out above.
17. Apart from the above, I refer the Court to the submissions already made at the beginning of this affidavit.
18. The law relevant to the present application is more fully dealt with in the application under CCT134/13. I do not intend to repeat all that is set out therein and shall address certain parts thereof herein.
19. On 17 March 2006, Act 58 of 2003 (Petroleum Products Amendment Act – “the PPAA”) was brought into operation and incorporated into the Petroleum Products Act (“PPA”), Act 120 of 1977. From pages 49 to 159 of CCT134/13 the state of the law pursuant to Act 25 of 2003 is set out with reference to how the legal representatives of the appellant see the state of the law. The content thereof is incorporated herein for purposes of this application for leave to appeal.
20. Without derogating from the generality of the aforesaid:
20.1. The domain of the “commercial purposes” of petroleum manufacture is, now defined and constituted by the PPA (as amended by the PPAA) by four specific “licenses”
and in terms of specific interactions allowed by the PPA between these licenses.
These licenses define what rights any person may and may not have in the petroleum industry domain, and impact directly on matters of locus standi and legal capacity.
20.2. From a reading of the Act, the domain consisting of the commercial purposes of petroleum products (see the definition of “manufacture” read with section 2A(4)(a)) ready for final use and consumption can only be accessed by the holder of the
“manufacturing license” created by the PPAA. This license enables final product, regardless of who owns it, to be brought into the domain at the “facility” in which the license pertains to be held there in readiness either for “distribution” by a licensed wholesaler or for collection by a licensed retailer (section 2A(1) read with section 2A(4) and section 2A(7)).
20.3. The “old order”, based on alleged “common law” rights, derived directly from the fact that all “petrol” was owned by the oil companies who owned the refineries by which it was manufactured. From this basis, the oil companies, such as Engen, could then acquire overall power to both monopolise land that was used for retail operations as well as to dictate who might or might not sell its “petrol”.
20.4. The criteria of ownership of “petrol” as the basis for access to or participation in the
“commercial market” has been jettisoned by the PPAA and the prohibition of “brand monopoly” of land used for petrol stations and of retail business is expressly specifically bolstered by the PPAA.
20.5. Under the PPA (as amended), only the holder of a retail license may sell “petrol” to the public at large and this holder may only (a) be the proprietor of the retail business and (b) must buy petrol product from the holder of a manufacturing license or the holder of a wholesaling license or “both” (section 2A(7)).
20.6. The holder of a manufacturing license is prohibited from distributing petrol as a business and is limited to holding the facility for storage of “petrol” aimed at the open
“final consumer” market. The right to “distribute” petroleum as a business belongs only and strictly to the holder of a wholesaling license.
20.7. Section 2A(5) of the PPA reads as follows:
No person may make use of a business practice, method of trading agreement, arrangement, scheme or understanding which is aimed at or would result in –
(a) a license wholesaler holding a retail license except for training purposes…
20.8. The practice of Engen, by way of franchise agreements, head-leases and sub-leases to impose brand monopoly over a retail site and the right not to renew franchise agreements, head-leases and sub-leases is a matter of “holding” as envisaged by
section 2A(5) of the PPA. This constitutes a criminal violation of the PPA, conduct prohibited by the PPA, conduct prohibited by the Competition Act, and a violation of various sections of the Bill of Rights.
21. I respectfully state that the current state of the law does not and cannot accord or grant any kind of possessory right over the premises of which a petrol station operates to anyone other than the holder of a retail license (being the appellant in this case).
22. The PPA specifically prohibits an oil company such as Engen from holding a retail license (as is more fully set out in section 2A(5)).
23. The PPA does not allow Engen to infringe the rights of the appellant in respect of its retail license and Engen cannot make possessory claims over the property of the retail licence holder, which property includes both the goodwill of the retail business as well as the retail license holder’s exclusive right over the premises.
24. In casu, the retail license over the premises in question is held by the appellant to the exclusion of any other person. Engen is not entitled to unilaterally decide who may or may not hold retailing rights (which is the effect of the order sought). The eviction sought by Engen, has the effect that the appellant’s retailer’s licence is rendered null and void in the event that the order of eviction is allowed to stand. Such conduct, which avoids all fair and just administrative action protections and infringes such rights, infringes the rights of the appellant which holds the retailing license in respect of the premises.
25. The conduct of Engen further impacts on rights of previously disadvantaged individuals. I confirm that the business of the appellant is a source of livelihood for my family and for me. I respectfully state that the order sought for the eviction of the appellant violates both property and livelihood rights as well as brings about a situation where in effect the appellant and its member are in a state of servitude to an oil company, namely Engen, which has no legal right whatsoever to conduct retail business (such conduct being prohibited by inter alia section 2A(5) of the PPA as amended by the PPAA) – and has no right to maintain vertical or horizontal monopoly of its brand over land licensed to retail petroleum. Such conduct is prohibited by section 4 and 5 of the Competition Act, Act 89 of 1998.
26. The present application for leave to appeal furthermore raises the constitutional issue of the balancing of rights of a non-owner lessor and a sub-lessee, (accepting that such a lease is not in fact prohibited by the law as it currently stands), where such sub-lessee is the only entity with a retail license in respect of the premises.
CONCLUSION:
27. In the present matter, I respectfully state that it is in the interest of justice that leave to appeal be granted. The constitutional issues raised are relevant to various retail license holders in the petroleum industry as well as wholesalers who hold a wholesale license and to the general public.
28. In the premises I respectfully request the Court to grant leave to appeal to this Court and respectfully state that a proper case has been made out for the relief sought in the notice of motion.
__________________________
MIGHTY MWALE
“Signed and sworn to before me at ……… on this day of ……….. 2014 after the deponent acknowledged to me that he knows and understands the contents of the above affidavit, that it is true and correct, and that the oath is binding on his conscience.”
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COMMISSIONER OF OATHS FULL NAME:
BUSINESS ADDRESS:
CAPACITY:
AREA:
