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Reportable: YES/NO

Circulate to Judges: YES/NO

Circulate to Magistrates: YES/NO

Circulate to Regional Magistrates: YES/NO 

IN THE HIGH COURT OF SOUTH AFRICA

NORTH WEST PROVINCIAL DIVISION, MAHIKENG

                                                                         CASE NO:  UM62/2020

                                                                                              UM227/2020

In the matter between:

FRAQUR 149 (PTY) LTD                                          APPLICANT

AND

ENGEN PETROLEUM LIMITED                               1^ST RESPONDENT

AAKILA CARRIM                                                      2^ND RESPONDENT

ABDUL AZIZ MERCHANT                                        3^RD RESPONDENT

JUDGMENT

DJAJE J

[1]     The only issues to be determined in this judgment are the costs in the main application and the urgent interlocutory application of reinstatement. The two applications were brought before court under the above case numbers. In the main application of UM62/2020 the applicant was Fraqur and in UM227/2020 the applicant was Engen Petroleum. In this judgment for the sake of convenience the parties will be referred to as they appear in the main application.

[2]     The main application was initially launched as an urgent application with Part A and B. The second matter was an urgent application for the reinstatement of the main application on the roll. I will deal with the two applications separately hereunder.

Main application- UM62/2020

[3]     The applicant operated an Engen Fuel Station for 15 years leased from the 1^st respondent. The said lease was expiring on 30 March 2020. On 27 February 2019 the first respondent wrote a letter to the applicant informing that it would not be renewing the lease after 30 March 2020. As a result and in terms of clause 44.2 of the agreement the applicant was entitled to sell the business.  “44.2….Should the Company advice the Dealer that it does not intend renewing the lease between the parties, the Dealer shall be entitled to attempt to sell the Business during the remaining period of the lease, and the Company shall not unreasonably withhold its consent to such sale. Should the Dealer not have sold the Business prior to the expiry date of the lease, the provisions of sub-clause 44.1 of this Schedule 2 shall apply and the Dealer shall not have the right to any compensation in respect of his loss of the business.” Valuations were exchanged between the parties in June 2019 and the sale price of R5 000 000-00 (five million rand) was agreed upon between the applicant and the first respondent. There were applicants who registered as prospective buyers and the second and third respondents were among the eight applicants who were shortlisted after the first respondent had conducted the relevant assessments. Interviews were conducted by the first respondent and the two prospective buyers selected were the second and third respondents.

[4]     The applicants started communicating with the first respondent to get feedback on who was selected as the preferred buyer by the first respondent from November 2019. There was correspondence sent to the first respondent by the applicant but no feedback was provided up until March 2020 when the lease agreement with the applicant was to expire. As a result the applicant launched an urgent application as follows against the respondents. No order was sought against the second and third respondents. In the notice of motion the following prayers were sought by the applicant:

“PART A

1.    That the application be hears as an urgent application in terms of Rule 6(12)(a) and (b) of the Uniform Rules of Court and, that the normal time-period and service, be condones and dispensed with;

2.    The Rental Agreement (“Annexure “H”) and Agreement of Lease and Operation of Service Station (Annexure “A”) and relevant Schedules (Annexure “B” to “G”) between the First Respondent and the Applicant, is hereby extended and in the interim and on same terms and conditions, pending the determination of Part B of the Notice of Motion;

3.    Costs only if opposed

4.    Further and/or alternative relief.

PART B

1.    The First Respondent’s failure to make the decision, with reference to the Request to Appoint, within a reasonable period, is reviewed and set aside.

2.    The First Respondent is ordered to finalise, approve and sign the Request to Appoint document, within 10 days from date of service of the order, and provide the Applicant with a copy forthwith.

3.    The First Respondent must notify the Second or Third Respondent, as the case may be, accordingly and provide the successful purchaser, with a Letter of Appointment.

4.    Failing compliance with prayer 2 above, the second Respondent is found to be the successful purchaser and the First Respondent is ordered to do all things necessary, including but not limited to provide, a letter of appointment and operating lease, so that the sale of the Fuel Station may proceed.

5.     Alternatively, the Third Respondent is found to be successful purchaser and the First Respondent is order to do all things necessary, so that the Fuel Station may proceed.

6.    Should the First Respondent fail or refuse to sign the necessary documents, then and in that event, the Sheriff is authorized to do all things necessary and sign all necessary documents so that the sale of Fuel Station may proceed.

7.    The First Respondent is ordered to pay costs.

8.    Further and/or alternative relief.”

[5]     Affidavits were exchanged between the parties and there was an agreement to extend the lease agreement and the Operation of the Service station. As a result Part A of the notice of motion was dispensed with and the matter was then enrolled for the hearing of Part B of the notice of motion. The hearing was set down for 19 November 2020. On 21 July 2020 the first respondent selected the second respondent as the successful buyer and the second respondent accepted the appointment on 27 July 2020. The appointment was as a provisional dealer at Engen Service Station whilst waiting for the retail licence. This selection of the second respondent by the first respondent meant that the first respondent had complied with prayer one to four of Part B of the notice of motion in the main application.

[6]     The applicant argued that it succeeded in both Part A and B and there is no reason why the first respondent should not pay the costs of the application. Further that the contract would have expired on 30 March 2020 had it not been of the urgent application and subsequent prayers in Part B. It was submitted that the first respondent provided no reason why it delayed in making the appointment of the second respondent.

[7]     In contention the first respondent argued that the main application was still born and should not have been launched let alone on an urgent basis. Further that there was no concession made that the matter was urgent. As far as Part B is concerned, the first respondent argued that it was brought in terms of Promotion of Administration and Justice Act 3 of 2000 (“PAJA”) when PAJA was not applicable. As such the application was flawed and the applicant on that basis would not have succeeded and liable for the costs of the application.

[8]     The basic rule in civil litigation in South Africa is that costs are in the discretion of the judicial officer. See Ferreira v Levin, Vryenhoek v Powell [1996] ZACC 27; 1996 (2) SA 621 (CC) at 624.

[9]     The general rule is that costs follow the event.  That is, the successful party should be awarded his or her costs.  See: Pelser v Levy 1905 TS 466 at 469. However this general rule can be departed from if good grounds exist for doing so.  See: Levin v Felt and Tweeds Ltd 1951 (2) SA 401(A) at 416.

[10]   The conduct of the parties in litigation should be considered in determining the party liable for costs. A party must be ordered to pay costs that were unnecessarily incurred through its failure to take certain steps or taking unnecessary steps. See: Gamlan Investments (Pty) Ltd and another v Trillion Cape (Pty) Ltd and another 1996 (3) SA 692 (C).

[11]   It is common cause that there was a lease agreement between the applicant and the first respondent which was due to expire on 30 March 2020. The first respondent had already informed the applicant that the agreement would not be renewed. As stated in the agreement the applicant had to sell the business and needed the coorporation of the first respondent to select a buyer. The first respondent failed on numerous occasions to give feedback to the applicant about the selection process nor did the first respondent give an explanation why the selection process was taking long or being delayed. The time for the expiration of the lease agreement was closing in and no information was forthcoming from the first respondent despite numerous correspondence from the applicant.

[12]   The expiration of the lease had a financial implications for the applicant and applicant was left with no option but to approach court. This application was necessitated by the delay on the part of the first respondent in failing to inform the applicant of the progress relating to the selection process or appointment of the successful buyer. It was only after the application was launched that the first respondent acted by firstly agreeing to extend the lease and then taking the decision to appoint the successful buyer. In my view it was necessary for the applicant to bring the application to extend the lease and compel the first respondent to take a decision. Failure by the applicant to institute legal proceedings would have resulted in the loss of revenue for the applicant. The first respondent only acted after the legal proceedings were instituted. As such the applicant was successful and I see no reason why the first respondent should not pay the costs of the main application.

The Interlocutory Application-UM227/2020

[13]   The main application had been set down for hearing on 19 November 2020. However after the developments in July 2020 of the appointment of a successful buyer, the applicant was of the view that the matter was not ripe for hearing and should be removed from the roll. The first respondent insisted that the matter should proceed. On 30 October 2020 the applicant filed a notice to have the matter removed from the roll of 19 November 2020. The first respondent on 10 November 2020 brought an urgent application for the following relief:

         “1.      

1.1          Condoning the non-compliance with the Rules, time periods and manner of service prescribed in the High Court Rules and permitting the matter to be enrolled and heard as a matter of urgency;

1.2          Re-instating the main application on the opposed roll for hearing on 19 November 2020;

1.3          Setting aside and declaring invalid as an irregular step the notice of removal served by the respondent’s attorneys of record dated 30 October 2020;

1.4          Interdicting and prohibiting the respondent and/or its attorneys of record from serving or filing a notice of removal save in accordance with the provisions of Rule 41; and

1.5          Costs of this urgent application to be awarded against the applicant’s attorneys de bonis propriis on the attorney client scale alternatively such other cost order as the above Honourable Court deems meet.”

[14]   The application was opposed by the applicant. On the date of hearing the application was struck off the roll on the basis that there was no need for such a relief and the application was unnecessary. The issue of costs was reserved to be dealt with in the main application.

[15]   The first respondent argued that it was necessary to bring the urgent application as they had not agreed to the removal of the application from the roll or that the application was not ripe for hearing. The first respondent submitted that before launching the urgent application, they were advised by the Registrar of this Court that they were required to file a practice note by 17 November 2020 setting out their position and the Judge President would give direction. Despite that advice, they proceeded with the urgent application. No explanation was furnished why the first respondent ignored the advice from the Registrar or why they thought they would not be heard on 19 November 2020. Clearly the matter had not been removed from the roll as there had been no order of Court removing it from the roll.

[16]   During argument, counsel for the first respondent argued that the applicant had no reason to oppose the urgent interlocutory application and as such should pay the costs for such opposition as it was unnecessary. In the notice of motion the first respondent sought a cost de bonis propiis against the applicant’s attorneys. This is a drastic order against the attorneys and there was every reason to oppose the application. The first respondent had no reason to bring the urgent application to reinstate the main application when the matter was still on the roll of 19 November 2020 and furthermore seek such a drastic cost order against the attorneys of the applicant. The step taken by the first respondent was unnecessary and as such the applicant cannot be mulct with the costs of such an application.

Order

[17]   Consequently, the following order is made:

1.   The first respondent is ordered to pay the costs of the main application in UM62/2020 and the costs of the interlocutory application in UM227/2020 on opposed basis;

2.   The first respondent is ordered to pay the costs of 7 May 2020

J. T. DJAJE

JUDGE OF THE HIGH COURT

NORTH WEST DIVISION, MAHIKENG

APPEARANCES

DATE OF HEARING                               :        07 MAY 2021

DATE OF JUDGMENT                           :        20 MAY 2021

COUNSEL FOR APPLICANT                 :        MR WESSELS

COUNSEL FOR RESPONDENTS          :        ADV VAN DER SPUY

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