Bright Idea Projects 66 (Pty) Ltd v Former Way Trade and Invest (Pty) Ltd and others
| Jurisdiction | http://justis.com/jurisdiction/166,South Africa |
| Judge | Mossop J |
| Judgment Date | 27 June 2023 |
| Citation | 2023 JDR 2301 (KZP) |
| Hearing Date | 12 May 2023 |
| Docket Number | 283/2018P |
| Court | KwaZulu-Natal Division, Pietermaritzburg |
Mossop J:
As its trading name, ‘All Fuels’, suggests, the applicant is a wholesaler and supplier of all fuels, including petrol and diesel (individually referred to by their respective names and collectively referred to as ‘fuel’). It is also a property owner. On its property located at 238 Chief Albert Luthuli Street, Pietermaritzburg it constructed a service station. It leased that service station (the leased premises) to the first respondent from where it operated a Caltex service station. From the leased premises, the first respondent sold fuel to the public, that fuel having been purchased by it from the applicant in terms of an agreement between the parties (the agreement).
At its inglorious end, the relationship between the applicant on the one hand and the first respondent and its guiding minds, the second and third respondents, on the other could, perhaps, be described as being antagonistic. It appears that it was not initially so, but the relationship spoiled and decayed over time. This was ultimately manifested in multiple and protracted legal proceedings between them. A brief narration of this litigious history will assist in understanding the later conduct of the first to third respondents of which complaint is made by the applicant.
2023 JDR 2301 p3
Mossop J
It appears that a dispute first arose regarding the first respondent’s obligation to purchase all its fuel from the applicant, as required in terms of the agreement. On 22 January 2018, Poyo-Dlwati J of this division resolved that issue in favour of the applicant, when she granted an order against the first respondent in terms of which she directed that it was to regard the agreement as being binding upon it and the first respondent was consequently obligated to purchase its fuel from the applicant who, in turn, was obligated to supply the same to the first respondent.
A dispute then arose over the first respondent’s occupation of the leased premises and the applicant instituted eviction proceedings against it, which were opposed. On 10 July 2018, D Pillay J of this division (Pillay J) found in favour of the applicant and ordered the first respondent to vacate the leased premises. [1] Three years then passed while the first respondent sought to appeal the decision of Pillay J to a succession of courts:
The first appeal was to a full court of this division. It failed;
Two attempts were then made to secure leave to appeal from the Supreme Court of Appeal. Both failed; [2] and
The Constitutional Court was then also approached, but after hearing argument on 9 March 2021, this application also failed when leave to appeal was finally refused on 28 September 2021. [3]
While these attempts by the first respondent to revisit the judgment of Pillay J were ongoing, during 2019 the applicant and the first respondent also referred certain issues between them to arbitration in terms of the Petroleum Products Act 120 of 1977. The arbitration was before Advocate Michael Kuper SC (Kuper SC) of the Johannesburg Bar. It is not necessary to explore these proceedings in any detail save to record that in those proceedings, the applicant, which was the respondent, identified 32 separate complaints about the way in which the first respondent had framed its statement of claim. When asked to consider these objections, Kuper SC upheld 18 of
2023 JDR 2301 p4
Mossop J
them and directed the first respondent to cure them by a specified date. By virtue of the events that thereafter occurred, of which more shortly, it appears that the arbitration proceedings in toto were abandoned by the first respondent and were never taken further and none of the complaints which were upheld by Kuper SC were cured by the first respondent.
Finally, the applicant contended that the first respondent had defied the order granted by Poyo-Dlwati J and consequently brought contempt proceedings against it. This resulted, ultimately, in Govender AJ, on 22 April 2020, sustaining the applicant’s complaint and finding the first respondent to be in contempt of the order. An application for leave to appeal this order was granted by Govender AJ and was set down for argument before the Supreme Court of Appeal on 16 November 2021. On 14 December 2021, this appeal went the same way as the first respondent’s other appeals and was dismissed with costs. [4]
During the interregnum between the granting of Pillay J’s order and the attempts by the first respondent to appeal that order, and as a consequence of the order granted by Poyo-Dlwati J, it was more or less business as usual between the applicant and the first respondent. Fuel was ordered by the first respondent from the applicant and paid for by it utilising the payment mechanism agreed on between the parties. This mechanism was payment by way of debit order. Throughout the duration of their business relationship, spanning approximately six years, it appears that the first respondent permitted a debit order to operate in favour of the applicant on its bank account, held with the fifth respondent, to make payment of the various amounts for which it became indebted to the applicant for from month to month.
Over the five-week period commencing on 30 August 2021 and terminating on 2 October 2021 (the period), the first respondent ordered on 11 separate dates some 228 244 litres of petrol from the applicant with a value of R3 686 597.20 and on eight dates it ordered some 130 275 litres of diesel with a value of R1 588 289.60 from the applicant.
2023 JDR 2301 p5
Mossop J
The orders for fuel were placed in writing with the applicant by the first respondent and electronically submitted to it by the first respondent. Before delivery occurred, the applicant would generate a written tax invoice in respect of each order received, recording the quantity of fuel ordered and the cost thereof. When the fuel was delivered, a written delivery note would be completed stating the quantity of fuel actually pumped into the first respondent’s holding tanks and would be signed for by a representative of the first respondent.
Invoices were also delivered to the first respondent by the applicant over the period for the monthly rental charges raised by it in respect of the leased premises. Over the period, the first respondent paid an amount of R340 229.85 to the applicant in respect of its rental obligations.
Over the period, the first respondent consequently paid to the applicant the total amount of R5 615 116.65, made up of the following amounts:
Petrol - R3 686 597.20;
Diesel - R1 588 289.60; and
Rental - R340 229.85.
These amounts were all paid electronically by the first respondent making use of the debit order system in place and, in due course, all of the payments made by the first respondent cleared in the applicant’s bank account held at the Standard Bank of South Africa Limited (Standard Bank).
As stated previously, the first respondent’s attempts to appeal Pillay J’s judgment came to an end with the Constitutional Court’s refusal of leave to appeal on 28 September 2021. The consequence of such refusal was that Pillay J’s judgment remained preserved and undisturbed and the first respondent was obliged to comply with its terms. This, finally, was acknowledged and accepted by the first respondent and it therefore agreed to vacate the leased premises by close of business on Tuesday, 5 October 2021. The first respondent adhered to this deadline and duly vacated the leased premises.
2023 JDR 2301 p6
Mossop J
Eleven days after the Constitutional Court dismissed its application for leave to appeal, and four days after vacating the leased premises, on Saturday, 9 October 2021, the first respondent caused the amount of R5 389 148.01 to be extracted from the applicant’s bank account with Standard Bank (the first reversal) and five days later, on Thursday, 14 October 2021, it extracted a further amount of R225 968.64 from the same bank account (the second reversal). The sum of these two amounts was R5 615 116.65, the precise amount of the payments made by the first respondent to the applicant over the period for its purchases of fuel and its rental payments.
When the applicant discovered the fact of the first reversal on 9 October 2021, its attorneys wrote to the fourth respondent on the first working day following the discovery and demanded that the money taken from its bank account be preserved by the fourth respondent pending the bringing of an application to the high court. At the date of this letter the second reversal had not yet occurred. Five days later, the applicant’s attorneys sought similar undertakings in respect of the second reversal. The fourth respondent subsequently, and not without some additional posturing by both the second respondent and the fourth respondent itself, placed the amount of R5 389 148.01 in an interest bearing trust account with the fourth respondent pending the determination of these proceedings. The balance of the funds in the amount of R225 968.64 remain in the first respondent’s bank account with the fifth respondent and have also been preserved by the fifth respondent. The position was not ideal as far as the applicant was concerned, but the situation was thus stabilised in a reasonably tolerable fashion.
The applicant then launched this application as an urgent application on Monday, 18 October 2021. It was opposed by the first, second, third and fourth respondents. On Wednesday, 20 October 2021, the matter came before Henriques J, who issued an order that, inter alia, required the fourth and fifth respondents to preserve the funds that they respectively held on behalf of the first respondent. The first, second and third respondents delivered their answering affidavit to the application on...
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