BP Namibia (Proprietary) Limited v Southline Retail Centre cc (APPEAL 269 of 2008) [2008] NAHC 115 (21 October 2008);
CASE
NO.: A 269/2008
SUMMARY
BP
NAMIBIA (PROPRIETARY) LIMITED
and
SOUTHLINE
RETAIL CENTRE CC
Manyarara,
AJ
21
OCTOBER 2008
Statute
– Petroleum Products Regulations (2000) GN 155 of 23 June 2000
– Amended Regulation 30 - Licence Certificate – Change
of information thereon – Application to Minister for approval
required.
Civil Procedure
– Eviction on an urgent basis – Petroleum business
premises – Procedure governed by stature – Non-compliance
therewith – Rule 6(12) not satisfied – Application
dismissed with costs on the higher scale.
CASE
NO. A 269/2008
IN
THE HIGH COURT OF NAMIBIA
In
the matter between:
BP
NAMIBIA (PROPRIETARY) LIMITED
APPLICANT
and
SOUTHLINE
RETAIL CENTRE CC
RESPONDENT
CORAM: MANYARARA,
A.J.
Heard
on: 26 September 2008
Delivered
on: 21 October 2008
_____________________________________________________________________________________
REASONS
MANYARARA, A.J.:
[1] This is an application
brought on an urgent basis to evict the respondent from certain
property leased from the applicant and to cancel the accompanying
franchise agreement for the operation of a petrol service station on
the property.
[2] At the hearing, I declined
to condone the applicant’s non-compliance with the Rules of
Court and ordered that the application be struck from the roll with
costs on the higher scale including the costs of two instructed
counsel, with reasons to follow. These are they.
[3] The applicant is the
registered owner of Erf 4501 Block B, Rehoboth (the property, also
referred to as “the premises”). It conducts as its
principal business the selling of petroleum fuels, lubricating oils,
liquefied petroleum gas, kerosene detergents and other petroleum
based products (the business). In conducting its business, the
applicant develops service stations on its land. The applicant then
leases the properties so developed and all buildings, fixtures,
fittings and equipment on its land to approved dealers for the
carrying on of service stations. On 31 August 2005 the applicant
entered into a lease agreement with the respondent, in terms of which
the applicant leased the property to the respondent for a period of 3
years commencing on 1 September 2005 and terminating on 31 August
2008. The parties also entered into a franchise agreement to subsist
for the duration of the lease, by which the applicant granted the
respondent the right and authority and licence to operate a “BP
Gold franchise operation” on the premises in accordance with
the “BP Systems and BP Trade Marks.” There was an option
for renewal of both agreements for a further period of one year,
whose interpretation is hotly disputed. No reference to the
arbitration clause mentioned by the papers was made by counsel in
their submissions and the point will be allowed to rest.
[4] In terms of a supply
agreement also entered into by the parties, the applicant undertook
to supply to the respondent, which undertook to obtain from the
applicant during the supply period (which coincided with the period
of the lease and franchise agreement), for resale, all the
respondent’s requirements of petroleum products and not to
accept any offer from any other person to supply the respondent with
petroleum products for resale from the premises. However, the
agreement provided that, in the event of the respondent (defined as
“the dealer”), upon the expiry of the supply agreement,
wishing to continue with the resale of petroleum products from the
premises, the dealer was not to accept any offer from any other
person to supply the dealer with petroleum products for resale from
the premises until the dealer had submitted to the applicant (defined
as “BP”) full details in writing of the terms and
conditions of such offer and a period of seven days from the date of
receipt by BP had expired.
[5] The present application was
delivered on 23 September 2008 for hearing on 26 September 2008 and
the founding affidavit and annexures totaled 250 pages. The relief
sought was two-fold. Firstly, the applicant sought condonation of its
non-compliance with the Rules of Court and an order declaring the
lease agreement terminated on 31 August 2008 by the effluxion of time
and ejecting the respondent and those holding under it from the
premises and authorizing the applicant to immediately take occupation
of the premises; and, secondly, a Rule
Nisi interdicting
and restraining the respondent from operating any petroleum retail
business from the premises pending the return date of the Rule
plus costs of the application on a scale as between attorney and
client.
[6] The respondent filed a
notice of opposition and delivered its answering affidavit and
annexures totaling 600 pages on the date of the hearing. The hearing
was stood down for several hours for the applicant to file a replying
affidavit which comprised 26 pages and was delivered about half an
hour before the commencement of the hearing.
[7] The preliminary issue which
the court was called upon to decide was whether or not the
application should be allowed to proceed as one of urgency. Mr. Hodes
contended on behalf of the applicant that the urgency of the matter
was apparent from the fact that the lease and franchise agreements
lapsed through the effluxion of time on 31 August 2008 without
renewal, from which date the respondent has occupied the property
unlawfully and unlawfully kept the applicant from re-entering the
property. Mr. Heathcote on behalf of the respondent contended that
the application was not urgent because of the protracted
correspondence annexed to the papers pointing to deeply rooted
disagreement between the parties over important issues relating to
the lease, franchise and supply agreement entered into by the
parties. The founding affidavit deposed by the applicant’s
financial manager, Raphael Chipoma, averred to the correspondence
referred to as follows:
“The essence of that
correspondence essentially entailed a dispute between the parties
concerning the Applicant’s demand for payment of fuel supplied
to the Respondent and the Respondent’s failure to pay its
franchise fees on the one hand, and, on the other hand, the
Respondent’s allegations that the Applicant on the one hand
failed and/or neglected to deliver sufficient fuel to the Respondents
and the Applicant’s alleged failure to maintain the systems on
the property.
The result of that dispute
was that the Respondent decided to sell the business conducted at the
property as a going concern and at the time when annexure “ZS5”
was addressed to the Respondent, the Respondent was still looking for
a suitable buyer.”
[8] Annexure “ZS5”
dated 1 July 2008 informed the respondent of the termination of the
lease, franchise and supply agreements between the parties on 31
August 2008 and that the applicant would contact the respondent “in
good time prior to the foresaid date to make arrangements for handing
over the site.”
[9] As it happened, the
respondent’s proposed sale of the business did not materialize
for reasons which the respondent by its facsimile dated 11 July 2008
blamed on the applicant. In the facsimile, the respondent also
sought the applicant’s views on the possibility of extension of
the dealer agreement and supplementary provisions thereto, which the
applicant flatly refused to consider. By its facsimile dated 29
August 2008 the respondent informed the applicant that the respondent
was prepared to sell the business and goodwill for a price of N$4.5
but negotiations with Agra had fallen through when the applicant
indicated to Agra that Agra could obtain the business from the
applicant “at a much lower price.”
[10] In the same letter, the
respondent’s legal practitioners drew the respondent’s
attention to the provisions of the Petroleum Products and Energy Act
13 of 1990 as amended (the Act) and the regulations made thereunder
relating to agreements between operators and wholesalers in the
petroleum industry (the petroleum regulations), to which I shall
revert.
[11] In reply to a subsequent
facsimile from the respondent, the applicant on 3 September 2008
addressed a facsimile to the respondent in the following terms –
denying that the respondent
has a valid and enforceable option to renew the lease agreement;
denying being unable to supply
fuel products to the respondent though it was under no obligation to
do so; and
demanding an undertaking from
the respondent that respondent will refrain from purchasing, storing
on and re-selling from the premises petroleum products from any
third party.
[12] The respondent continued
to in occupation of the premises and apparently ignored the
prohibition from obtaining petroleum products from third parties and
re-selling these from the premises, which precipitated this eviction
application.
[13] Rule 6(12) in terms of
which this application was brought provides that in every affidavit
or petition filed in support of an urgent application, the applicant
shall set forth explicitly the circumstances which he or she avers
render the matter urgent and the reasons why he or she claims that he
or she could not be afforded substantial redress at a hearing in due
course.
[14] The relevant provisions of
the amended petroleum regulation 30 provide as follows:
“Amendment of licence
or certificate.
If any information on a
licence or certificate is to be changed, the licence-holder or
certificate-holder shall prior to such change apply to the Minister
for an amendment of the licence or certificate, as the case may be.
If any such change of
information relates-
to a change of the
relevant premises, the provisions of regulation 27 shall be
complied with; or
in the case of a retail
licnece, to a change in the name of the operator, the records
required in terms of regulation 4(2) shall be supplied with regard
to the proposed new operator, and the proposed new operator shall
complete Form PP/1 as set out in Annexure B, in as far as it is
applicable, together with the application for an amendment
.
Notwithstanding regulation
31(4) and (5), if a retail licence-holder operates a retail outlet
in terms of an agreement with a wholesaler that is the owner of such
retail outlet, that wholesaler may in the following circumstances
apply to the Minister for a change in the name of the operator,
whether to that of the wholesaler or to any other operator:
If it is alleged by the
wholesaler licence-holder that the agreement between the wholesale
licence-holder and the retail licence-holder-
has been terminated by
reason of breach of contract on the part of the retail
licence-holder; or
has lapsed through the
effluxion of time, without renewal of the agreement;
The Minister shall not,
upon an application in the circumstances contemplated in
subregulation (3)(a), amend a licence unless the Minister-
has given the relevant
retail licence-holder notice in writing of the wholesaler’s
application;
has invited the retail
licence-holder to make representations to the Minister, within a
specified period, not being less than 14 days after receipt of the
notice, concerning the wholesaler’s application; and
has after the end of that
period considered any representations made by the retail
licence-holder.
(5) Upon the occurrence of
an event referred to in sub-regulation (3) the wholesaler concerned
shall, until the Minister decides on the application under
sub-regulation (4), be deemed to be the holder of the retail licence,
except if, in
the circumstances contemplated in the subregulation (3)(a) the fact
whether the agreement has lawfully been terminated or has lapsed is a
dispute between the parties”
(My emphasis)
[15] The circumstances which
the applicant averred rendered the matter urgent are that the
respondent should be evicted on the ground that the lease and
franchise agreement between the parties had lapsed through the
effluxion of time. In my view, the averment brought the application
squarely within the provisions of subregulation (5) read with
subregulation (4) which would deem the applicant to be the holder of
the retail licence of the business operated by the respondent on the
applicant’s property but
for the fact that the circumstances contemplated in subregulation
(3)(a) are disputed.
(Emphasis provided).
[16] The point seemed not to
have been in the contemplation of the applicant when it launched the
application to evict the respondent because no reference to the
petroleum legislation was made in the founding affidavit. The
applicant only reverted thereto in the replying affidavit after the
respondent raised the point starkly in the answering affidavit and
the replying affidavit then dealt therewith as follows:
“I fail to see the
relevance of the fact that the Respondent’s retail licence is
still valid and in fact open ended. It is because the Respondent
remains on the premises that the Applicant is unable to apply to the
Minister for the cancellation of the Respondent’s licence and
the issue of a new licence for any new dealer. The licence is in site
specific and will become redundant when the Respondent will leave the
property……”
[17] But that is precisely the
respondent’s ground of resistance to the relief sought, that
from the intricate and protracted background of the dispute which is
hardly disputed and which I endeavored to summarise in this judgment,
compliance with the legislation governing the petroleum industry is
necessary in order to effect any change in the name of the operator
of the retail outlet as the applicant proposes to do. Therefore, to
my mind, the averments made by the replying affidavit were an
admission, be it unintended, of the respondent’s contention
that the applicant had not made out a case for an order for the
eviction of the respondent to be granted on an urgent basis and that
the reasons given by applicant why it claimed that it could not be
afforded substantial redress at a hearing in due course had not been
substantiated.
[18] I agreed that the
requirements of Rule 6(12) had not been satisfied. Accordingly, I
declined to condone the applicant’s non-compliance with the
Rules of Court and ordered the application to be struck from the roll
on the terms made in the order.
__________________
MANYARARA, AJ
ON BEHALF OF THE APPLICANT
Adv. Hodes, S.C
assisted by Adv.
Schickerling
Instructed by:
Engling, Stritter & Partners
ON BEHALF OF THE RESPONDENT
Adv. Heathcote, S.C
assisted by Adv.
Obbes
Instructed by:
Krüger, van Vuuren & Co.