Mighty Solutions t/a Orlando Service Station v Engen Petroleum Ltd and Another

• Jurisdiction: South Africa

Mighty Solutions t/a Orlando Service Station v Engen Petroleum Ltd and Another
2016 (1) SA 621 (CC)

2016 (1) SA p621

Citation	2016 (1) SA 621 (CC)
Case No	CCT 211/14; [2015] ZACC 34
Court	Constitutional Court
Judge	Mogoeng CJ, Moseneke DCJ, Cameron J, Jafta J, Khampepe J, Madlanga J, Matojane AJ, Nkabinde J, Van Der Westhuizen J, Wallis AJ and Zondo J
Heard	August 11, 2015
Judgment	November 19, 2015
Counsel	C Woodrow (with D Jordaan) for the applicant.; M Chaskalson SC (with C van der Spuy) for the respondent.

Flynote : Sleutelwoorde F

Lease — Eviction — Commercial eviction — Defences — Subtenant cannot raise sublessor's lack of title as defence — Flowing naturally from rule that valid lease not dependent on title of lessor — No need to develop existing G common-law rule.

Lease — Business premises — Sublease — Action for eviction of subtenant — Subtenant cannot raise sublessor's lack of title as defence.

Lease — Title of landlord — Tenant's right to dispute. H

Headnote : Kopnota

The common-law rule that the subtenant cannot raise the sublessor's lack of title as a defence in an action for eviction flows naturally from the rule that a valid lease is not dependent on the title of the landlord. Unless expressly agreed, a landlord does not warrant that it is entitled to let. The rule is well-established and not in need of constitutional development. I (See paras [28] – [33] on the common law and paras [51] – [56] on why it did not require development.)

The court accordingly held that Engen, the holder of the head lease, could evict Orlando, its subtenant who ran an Engen-branded service station on the premises, despite the fact that Engen's head lease with the site owner had terminated before the commencement of the eviction proceedings. J

2016 (1) SA p622

Cases Considered

Annotations A

Case law

Southern Africa

Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration 1974 (3) SA 506 (A): dictum at 531D – 532G applied

Bane and Others v D'Ambrosi B 2010 (2) SA 539 (SCA) ([2009] ZASCA 98): dictum in para [7] applied

Barkhuizen v Napier 2007 (5) SA 323 (CC) (2007 (7) BCLR 691; [2007] ZACC 5): dictum in para [39] applied

Boompret Investments (Pty) Ltd and Another v Paardekraal Concession Store (Pty) Ltd 1990 (1) SA 347 (A): discussed and applied

Carmichele v Minister of Safety and Security and Another (Centre for Applied Legal Studies Intervening) C 2001 (4) SA 938 (CC) (2002 (1) SACR 79; 2001 (10) BCLR 995; [2001] ZACC 22): applied

Carmichele v Minister of Safety and Security and Another 2003 (2) SA 656 (C) (2002 (10) BCLR 1100): dictum in para [32] applied

Clarke v Nourse Mines Ltd D 1910 TS 512: applied

Director of Public Prosecutions, Transvaal v Minister of Justice and Constitutional Development and Others 2009 (4) SA 222 (CC) (2009 (2) SACR 130; 2009 (7) BCLR 637; [2009] ZACC 8): applied

Engen Petroleum Ltd v Mighty Solutions CC t/a Orlando Service Station [2014] ZAGPJHC 426: confirmed on appeal

Everfresh Market Virginia (Pty) Ltd v Shoprite Checkers (Pty) Ltd E 2012 (1) SA 256 (CC) (2012 (3) BCLR 219; [2011] ZACC 30): applied

F v Minister of Safety and Security and Others 2012 (1) SA 536 (CC) (2012 (3) BCLR 244; [2011] ZACC 37): dictum in paras [79] – [82] applied

Frye's (Pty) Ltd v Ries 1957 (3) SA 575 (A): applied

Government of the Republic of Zimbabwe v Fick and Others F 2013 (5) SA 325 (CC) (2013 (10) BCLR 1103; [2013] ZACC 22): dictum in para [104] applied

Gundu Service Station CC and Others v Engen Petroleum Ltd CC case No CCT 134/13: referred to

Gundu Service Station CC and Others v Engen Petroleum Ltd and Others CC case No CCT 123/14: referred to

Hillock and Another v Hilsage Investments (Pty) Ltd G 1975 (1) SA 508 (A): referred to

K v Minister of Safety and Security 2005 (6) SA 419 (CC) (2005 (9) BCLR 835; [2005] 8 BLLR 749; [2005] ZACC 8): dictum in para [44] applied

Kala Singh v Germiston Municipality 1912 TPD 155: applied

Khumalo and Another v MEC for Education, KwaZulu-Natal H 2014 (5) SA 579 (CC) (2014 (3) BCLR 333; [2013] ZACC 49): applied

Khumalo and Others v Holomisa 2002 (5) SA 401 (CC) (2002 (8) BCLR 771; [2002] ZACC 12): dictum in para [45] applied

Loxton v Le Hanie (1905) 22 SC 577: applied

Masiya v Director of Public Prosecutions, Pretoria and Another I (Centre for Applied Legal Studies and Another, Amici Curiae) 2007 (5) SA 30 (CC) (2007 (2) SACR 435; 2007 (8) BCLR 827; [2007] ZACC 9): applied

Minister of Local Government, Western Cape v Lagoonbay Lifestyle Estate (Pty) Ltd and Others 2014 (1) SA 521 (CC) (2014 (2) BCLR 182; [2013] ZACC 39): dictum in para [39] applied

Minister of Police v Mboweni and Another 2014 (6) SA 256 (SCA) ([2014] ZASCA 107): J dictum in paras [7] – [8] applied

2016 (1) SA p623

Minister of Safety and Security and Another v Carmichele 2004 (3) SA 305 (SCA) A (2004 (2) BCLR 133; [2003] 4 All SA 565; [2000] ZASCA 149): dictum in para [36] applied

National Union of Mineworkers and Others v Hartebeestfontein Gold Mining Co Ltd 1986 (3) SA 53 (A): dictum at 56G – 57E applied

Phumelela Gaming and Leisure Ltd v Gründlingh and Others 2007 (6) SA 350 (CC) (2006 (8) BCLR 883; [2006] ZACC 6): B referred to

Rail Commuters Action Group and Others v Transnet Ltd t/a Metrorail and Others 2005 (2) SA 359 (CC) (2005 (4) BCLR 301; [2004] ZACC 20): dictum in paras [41] – [43] applied

S v Zuma and Others 1995 (2) SA 642 (CC) (1995 (1) SACR 568; 1995 (4) BCLR 401; [1995] ZACC 1): dictum in para [17] applied

Salisbury Gold Mining Co v Klipriviersberg Estate (1893) Hertzog 186: C referred to

South African Maritime Safety Authority v McKenzie 2010 (3) SA 601 (SCA) ([2010] ZASCA 2): dictum in para [11] applied

United Watch & Diamond Co (Pty) Ltd and Others v Disa Hotels Ltd and Another 1972 (4) SA 409 (C): dictum at 417B – C applied. D

Canada

Haigh v Kent 2013 BCCA 380: referred to.

Case Information

C Woodrow (with D Jordaan) for the applicant.

M Chaskalson SC (with C van der Spuy) for the respondent.

An application for leave to appeal. E

Order

1.

Condonation for the late filing of the statement of facts and record is granted.

2.

Leave to appeal is refused.

3.

The applicant must pay costs, including the costs of two counsel. F

Judgment

Van der Westhuizen J (Mogoeng CJ, Moseneke DCJ, Cameron J, Jafta J, Khampepe J, Madlanga J, Matojane AJ, Nkabinde J, Wallis AJ and Zondo J concurring):

Introduction G

[1] The South African common law of contract is as old as the ancient city of Rome. It developed over centuries in Europe and in the courts of bygone colonies and provinces now making up the Republic of South Africa. Like customary law that has grown from the soil of our continent, H it has proven its value over time, but does not always meet the requirements of a constitutional democracy. Therefore it has to be developed in accordance with the spirit, purport and objects of the Bill of Rights. [1]

[2] This application for leave to appeal raises questions on the content of the law of lease. It concerns an attempt by a petrol wholesaler to evict a I

2016 (1) SA p624

Van der Westhuizen J (Mogoeng CJ, Moseneke DCJ, Cameron J, Jafta J, Khampepe J, Madlanga J, Matojane AJ, Nkabinde J, Wallis AJ and Zondo J concurring)

A licensed petroleum retailer from premises in Soweto where the retailer had conducted business under the wholesaler's brand.

Facts

[3] The applicant, Mighty Solutions CC trading as Orlando Service Station (Mighty Solutions), is a licensed petroleum retailer in terms of B the Petroleum Products Act (Act). [2] The first respondent is Engen Petroleum Ltd (Engen), a licensed wholesaler and distributor of petroleum products. The second respondent is the Controller of Petroleum Products (the Controller), appointed pursuant to the Act. It was cited insofar as it may have an interest, but did not participate in the C proceedings.

[4] Engen leased a property from its registered owner on the corner of Soweto Highway and Mooki Street, Orlando East, Soweto. [3] It developed the property into a branded service station, investing its capital in installing the necessary equipment, including underground tanks and D pumps. In September 2005 Engen entered into an operating lease with Mighty Solutions. Pursuant to this lease, which would be valid until the end of March 2008 and was cancellable at a month's notice by either party, Mighty Solutions operated a service station on the site. It used Engen's equipment, signage and trademarks.

E [5] The operating lease between Engen and Mighty Solutions expired at the end of March 2008. It then continued on a month-to-month basis until it was validly cancelled in July 2009. Following the cancellation, Mighty Solutions continued to occupy the site. It continued using Engen's equipment, signage and trademarks without paying rent to Engen or the registered property owner.

Previous applications to this court F

[6] Mighty Solutions was one of several fuel retailers that previously sought direct access to this court in Gundu Service Station. [4] The parties sought to challenge the validity of the agreements that major oil companies enter into with petrol station retailers. They argued that the G agreements infringe several of the retailers' fundamental rights recognised in the Bill of Rights and that the Act had created a new dispensation in the industry, one based on the allocation of manufacturing, site, wholesale and retail licences, to the exclusion of private contractual agreements. These private agreements, it was argued, enforced and perpetuated the dominant position of oil companies in a H way that was at odds with the purpose of the Act. The application was dismissed on the grounds that it was not in the interests of justice to hear it at that stage.

2016 (1) SA p625

Van der...