THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case no: 1341/2018

In the matter between:

FORMER WAY TRADE & INVEST (PTY) LTD
APPLICANT
and
BRIGHT IDEA PROJECTS 66 (PTY) LTD

RESPONDENT

Neutral citation: Former Way Trade & Invest (Pty) Ltd v Bright Idea
Projects 66 (Pty) Ltd (Case no 1341/2018) [2020] ZASCA 118 (1 October
2020)
Coram:
WALLIS, ZONDI and MOCUMIE JJA, GOOSEN and
MABINDLA-BOQWANA AJJA

Heard:
26 August 2020
Delivered: This judgment was handed down electronically by circulation to
the parties’ representatives via email, publication on the Supreme Court of
Appeal website and release to SAFLII. The date and time for hand-down is
deemed to be 09h45 on 1 October 2020.

Summary: Application for reconsideration of refusal of leave to appeal in
terms of s 17 (2) (f) of Superior Courts Act 10 of 2013 – applicant conducting
business as retailer of petroleum products - respondent obtained order evicting
applicant from premises owned by it on expiry of franchise agreement – High
Court found no new franchise agreement concluded and refused stay of
proceedings pending arbitration – Leave to appeal refused by high court and
this court on petition -  On reconsideration no need to vary this court’s order
refusing leave to appeal – Order confirmed.
_____________________________________________________________
ORDER
_____________________________________________________________

On application: Reconsideration of application for leave to appeal from
KwaZulu-Natal Division of the High Court, Pietermaritzburg (D Pillay J,
sitting as court of first instance):- judgment reported sub nom Bright Idea
Projects 66 (Pty) Ltd v Former Way Trade and Invest (Pty) Ltd 2018 (6) SA
86 (KZP); [2018] ZAKZPHC 29.

1. The order of this court dismissing the application for leave to appeal is
confirmed.
2. The applicant is ordered to pay the costs of the application for leave to
appeal and its reconsideration, such costs to include those consequent upon
the employment of two counsel.

_____________________________________________________________
JUDGMENT
________________________________________________________________________

Goosen AJA (Wallis, Zondi and Mocumie JJA and Mabindla-Boqwana
AJA concurring)

[1] The respondent Bright Idea Projects 66 (Pty) Ltd, trades as a wholesaler
of petroleum products under the name All Fuels. It is the owner of a property
situated at 238 Albert Luthuli Street, Pietermaritzburg. Since about February
2015, the applicant, Former Way Trade & Invest (Pty) Ltd (‘Former Way’),
has conducted business on the property as a Caltex service station under the
name Premier Service Station. When the franchise agreement under which it
was operating expired on 31 December 2017 Former Way refused to vacate
the property and it has since then continued to operate the service station
business. The endeavours by All Fuels to evict Former Way give rise to the
present application.

[2] All Fuels launched an application to evict Former Way from the
property on 15 January 2018. Former Way filed a counter-application in
which it sought to enforce an agreement extending its tenure, alternatively an
order staying the high court proceedings pending arbitration pursuant to s 12B
of the Petroleum Products Act, 120 of 1977 (‘the Act’). The matter came
before D Pillay J who, on 19 July 2018, dismissed the counter-application and
granted an eviction order directing Former Way to vacate property. She
refused leave to appeal.

[3] An application for leave to appeal was dismissed by two judges of this
court. Former Way then applied for reconsideration of that order in terms of s
17 (2) (f) of the Superior Courts Act, 10 of 2013. Navsa AP referred that
refusal of leave to appeal to this court for reconsideration and, if necessary,
variation. Upon reconsideration the court hearing the application is required
to consider afresh whether leave to appeal should be granted as provided for
by s 17 (1) of the Superior Courts Act.1 The merits of the appeal accordingly
only fall to be considered for purposes of determining whether prospects of
success are established to meet the requirements for granting leave to appeal.

The facts
[4] On 1 January 2003, Caltex Oil SA Pty Ltd (‘Caltex Oil’) entered into a
franchise agreement in terms of which it, as franchisor, granted Readyform
1030 CC (‘Readyform’) the right to operate a Caltex service station on the
premises situated at 238 Albert Luthuli Street, Pietermaritzburg (‘the
premises’). In terms of this agreement Caltex Oil leased the premises to
Readyform and undertook to supply it with petroleum products for retail to
consumers. The agreement was for a period of five years but included two
renewable option periods each of five years duration.

[5] On 30 August 2005, the franchise agreement between Caltex Oil and
Readyform was ceded and assigned to Shantyrien Service Station CC
(‘Shantyrien’), which thereafter operated the retail business as franchisee. In
October 2005 Caltex Oil changed its name to Chevron South Africa (Pty) Ltd
(‘Chevron’).

1 See Notshokovu v S [2016] ZASCA 112 para [2].

[6] On 1 February 2011, the franchise agreement between Chevron and
Shantyrien was ceded and assigned to Tomdia Service Station CC (‘Tomdia’).
Tomdia thereafter traded as the franchisee under the style Premier Service
Station.

[7] On 23 December 2011, Chevron and All Fuels concluded an agreement,
referred to as a Retail Assignment Agreement in terms of which All Fuels
purchased the immovable properties owned by Chevron, on which a number
of retailers conducted retail businesses as retailers of petroleum products. This
agreement also ceded and assigned the agreements in terms of which these
retailers operated from the properties to All Fuels. Chevron and All Fuels also
concluded a Branded Marketer Agreement which conferred upon All Fuels
the right to market and sell Chevron products as wholesaler in the Southern
Kwa-Zulu Natal region. The effect of these two agreements was that All Fuels
effectively stepped into the shoes of Chevron in relation to the retailers of
Chevron products in that region. It is common cause that one of the properties
acquired by All Fuels was the premises from which Tomdia conducted
business as Premier Service Station. It is also common cause that the original
franchise agreement concluded between Caltex Oil and Readyform was
extended for each of the two renewal periods at the option of the relevant
retailer. The date of termination of the franchise agreement was 31 December
2017.

[8] In February 2015, Tomdia sold the Premier Service Station business to
Former Way. The sale was conditional upon the written approval of All Fuels
as provided for in the franchise agreement.  It is common cause that on 26
February 2016 Tomdia, All Fuels and Former Way signed a cession and

assignment agreement in respect of the franchise agreement. The effective
date of the agreement was 1 March 2015, from which date Former Way had
occupied the premises. The franchise agreement conferred no right or option
to renew upon Former Way. It was scheduled to terminate on 31 December
2017.

[9] Clause 11 of the franchise agreement provided, inter alia, that:
‘Upon termination of this Contract, for whatever reason:-
11.1.1 the licence / franchise herein granted together with the right of occupation of the
Premises will cease to be of any force and effect;
11.1.2 the FRANCHISEE and its permitted assigns, heirs and executors will forthwith
surrender possession of the Premises to the FRANCHISOR, which Premises shall
be in such repair and condition as prescribed in the lease agreement and, if
applicable, the Retail Outlet Standards manual;’

[10] Clause 8 of the cession contained a ‘whole agreement’ clause which
provided that it was the entire agreement between the parties and that,
‘None of the parties relies in entering into this agreement upon any warranties,
representations, disclosures, or expressions of opinion which have not been incorporated
into this agreement;’

[11] On 30 June 2017 All Fuels forwarded to Former Way a notice of
termination of the franchise agreement outlining the consequences of
termination as set out in clause 11 of the franchise agreement.  Mr Lee Bentz,
on behalf of Former Way, acknowledged receipt of the notice on 4 July 2017.
Former Way failed to vacate the premises upon expiry of the franchise
agreement.

The eviction proceedings
[12] All Fuels commenced eviction proceedings on 15 January 2018. They
were opposed on two related grounds. The first was that Former Way had
concluded an enforceable ‘renewal agreement’ with All Fuels. This was a
misnomer as the agreement described in the replying affidavit was unrelated
to the franchise agreement between All Fuels and Tomdia that had been ceded
and assigned to Former Way on 26 February 2016. It was an agreement
allegedly concluded between December 2014 and 27 February 2015 for a new
franchise agreement to replace that agreement, and to endure for five years,
with an option to renew thereafter for a further five years. The second
contention was that the failure by All Fuels to provide Former Way with this
franchise agreement as agreed had been the subject of a request for arbitration
in terms of s 12B of the Act. Since the envisaged arbitration would deal with
All Fuels’ failure to honour its obligation to provide Former Way with a
franchise agreement, the high court proceedings ought to be stayed pending
such arbitration. By the time the eviction application was heard in the high
court there had been a referral to arbitration pursuant to the request. It was
contended before us that this resulted in a complete ouster of the high court's
jurisdiction.

[13] Counsel for Former Way accepted that the ceded franchise agreement,
in terms of which it had occupied the premises owned by All Fuels, had
terminated on 31 December 2017.  Any right of occupation beyond
termination of the franchise agreement would need to be determined on the
basis of whether the evidence established the existence of an agreement

conferring such right of occupation. In this respect Former Way was saddled
with an onus to prove such right of occupation.2

A new franchise agreement
[14] Former Way’s case insofar as the conclusion of a franchise agreement
was concerned was the following. In 2014 when Former Way was engaged in
discussions with Tomdia to purchase the business it was aware of the limited
duration of the existing franchise agreement. Tomdia was then seeking
payment of a purchase price of R8 million. Former Way therefore sought
assurance that it would secure a further period as franchisee. When it was
established that All Fuels would consider a further franchise agreement upon
payment of a brand fee or royalty payment of R3.25 million, a reduction in
the purchase price was negotiated.

[15] On 22 December 2014 All Fuels wrote to Former Way to confirm
acceptance of its application for appointment as a retailer in substitution of
Tomdia. In this letter All Fuels stipulated as a condition of such acceptance
that Former Way sign a cession of the existing franchise agreement. Mr Bentz
acknowledged receipt and acceptance of these stipulated terms on 31
December 2014. The letter made no reference to a franchise agreement for
five years with the option to renew for a further five year period.

[16] According to Mr Bentz, however, it was agreed that a franchise
agreement would be concluded for a period of five years with an option to
renew and that Former Way would pay to All Fuels an amount of R3.25

2 Chetty v Naidoo 1974 (3) SA 13 (A) at 20A; Airports Company South Africa Limited v Airport Bookshops
(Pty) Ltd t/a Exclusive Books 2017 (3) SA 128 (SCA) para 25.

million plus VAT as a royalty. Former Way was required to sign a cession of
the existing franchise agreement. A letter dated 27 February 2015 written by
Ms Maria Watson, General Manager of All Fuels, to Mr Bentz recorded that
All Fuels was prepared to conclude a franchise agreement for five years with
an option to renew, upon the previously stipulated conditions which included
that Former Way sign a cession of the existing franchise agreement.  The letter
enclosed an invoice for payment of the royalties.  Mr Bentz did not sign the
letter as required and did not pay the royalty fee.

[17] Upon being presented with a cession agreement on 30 July 2015 he
refused to sign ‘until … favoured with the contemplated franchise agreement’.
He maintained this position when a further cession agreement was presented
in October 2015, since it referred to a ‘future franchise agreement’ and made
provision for a non-refundable royalty payment. In an email addressed to All
Fuels on 23 November 2015 Mr Bentz explained the delay in responding to
the request to sign the cession agreement on the basis that he had sought legal
advice. According to the email he was advised not to sign the cession
agreement. He suggested that a standard cession agreement be signed and that
in due course a new franchise agreement for five years with an option to renew
be signed. Upon signature, he stated, the royalty fee would be paid.

[18] On 22 February 2016 All Fuels sent a notice of termination of the
franchise agreement to Former Way.  This occurred prior to the signature of
the cession, but when Former Way was already in occupation of the premises
and trading therefrom. In a letter of the same date the circumstances giving
rise to the notice of termination were set out in the following terms.
‘Prior to agreeing to sign a Cession of Franchise Agreement, you requested our client to guarantee
to you that it will be extending the Franchise Agreement, to be ceded and assigned to you by the

Franchisee. Our client considered this request and informed you that it was prepared to extend the
Franchise Agreement subject to certain conditions.
Our client has been unable to reach an agreement with you on the aforesaid basis and we are
instructed to inform you that our client hereby revokes, with immediate effect, any acceptance,
agreement and / or offer of whatsoever nature, contained in any correspondence, document or
communication to you and from you, our client or any third party in regard to the Cession of the
Franchise Agreement and Extension of the Franchise Agreement.’

[19] The letter went on to state that in order for Former Way to continue as
dealer at the Premier Service Station until termination of the franchise
agreement, it was required to sign an accompanying cession of the franchise
agreement. It is this cession which was signed by Former Way on 26 February
2016.

[20] This description of events demonstrates that All Fuels never provided
Former Way with the proposed franchise agreement on a five plus five years
basis, although it was always willing to accept a cession and assignment of
the existing franchise agreement. The stumbling block appears to have been
the refusal to pay the 'brand fee' or royalty payment until after the new
franchise agreement had been produced and signed. The reason given was that
this would be 'non-refundable' although it is difficult to see how that could
ever be the case given that the quid pro quo for such payment was the
franchise agreement. A refusal to conclude the latter would not leave Former
Way without a remedy. Ordinarily the refusal to conclude the agreement
would make the fee recoverable under one or other of the condictiones.

[21] In any event, it is apparent that the terms of the agreement contended
for had not been resolved and that both parties intended that the agreement
would be reduced to writing. This accorded with Former Way's frequent

demand to be provided with a franchise agreement and the terms of its request
for arbitration, which was based on All Fuels' failure to provide Former Way
with a franchise agreement.3 The email Mr Bentz sent to All Fuels on 23
November 2015 after seeking legal advice is telling. In explaining why
Former Way was unwilling to pay the royalty fee until the signature of the
proposed franchise agreement he dealt with the protection of Former Way's
interests 'if we do not agree on the next FA[franchise agreement]'. It could
hardly be clearer that agreement on the terms of the new franchise agreement
and signature of the document were required for any contract to come into
force.4

[22] All Fuels' position that there was no binding agreement in relation to
the proposed new franchise was made clear in correspondence before
signature of the cession of the existing franchise agreement. Former Way
nonetheless signed the latter and continued to occupy the premises under it,
without taking any steps to establish or enforce its alleged rights under the
alleged new franchise.

[23] Counsel argued that notwithstanding these difficulties confronting
Former Way's case there was a sufficient dispute of fact for the judge in the
high court to have been obliged to refer the case for the hearing of oral
evidence on this issue. This argument does not hold water. It ignored the fact
that the onus rested on Former Way to justify its continued occupation of the
premises despite the expiry of the original franchise agreement. It also ignored

3 Goldblatt v Freemantle 1920 AD 123 at 129; Wood v Walters 1921 AD 303 at 305.
4 See Pillay and Another v Shaik and Others 2009 (4) SA 74 (SCA) para 50 and the authorities cited
therein.

the fact that no request had been made to the judge to exercise her discretion
to refer the case for the hearing of oral evidence.

[24] Largely for these reasons the high court held that Former Way had not
established a right of occupation of the premises as against All Fuels. There
is no reasonable prospect of this court taking a different view of the evidence.
Accordingly, there is nothing in this argument justifying a departure from the
original view taken by the two judges of this court to dismiss the application
for leave to appeal.

The effect of the s 12B referral
[25] The request for referral to arbitration was submitted on 22 December
2017, shortly before the expiry of the franchise agreement. It set out in some
detail, by way of background, contentions in terms similar to those advanced
in defence of the application before the high court. The request commenced
with a reference to the agreement by which Former Way purchased the
Premier Service Station from Tomdia, alleging that this agreement was
subject to All Fuels entering into a franchise agreement with Former Way.  It
then stated that an agreement was reached between All Fuels and Former Way
that upon payment of an amount of R3,25 million plus VAT All Fuels would
‘give Former Way a franchise agreement for a period of 5 years from the 1st
March, 2015 with an option of a further 5 years’. This was the agreement,
albeit incorrectly termed a ‘renewal agreement’ before the high court, upon
which Former way founded its right to continued occupation of the premises.

[26] The request proceeded to record Former Way’s refusal to make
payment of the royalty fee on the basis that the franchise agreement would

only be concluded at the expiry of the existing franchise agreement. This was
unacceptable since the royalty payment was non-refundable whereas the terms
of the franchise agreement to be concluded were unknown and potentially
prejudicial to Former Way.  The failure by All Fuels to provide it with a
franchise agreement and the insistence by All Fuels upon payment of the
royalty fee amounted to unfair and unreasonable contractual practices as
envisaged in s 12 B of the Act. This was the principal dispute referred to
arbitration, although the request outlined several related disputes.

[27] The Controller issued a notice referring the disputes to arbitration on
21 February 2017 after the eviction proceedings had commenced. The notice
framed the disputes as follows:
‘5.1
The failure by All Fuels to provide [Former Way] with a Franchise Agreement as
agreed and their insistence on the non-refundable payment of royalties of R3,250,000 plus
VAT payable upfront; and the failure to provide [Former Way] with the balance of the
Franchise Agreement ceded to it, all amount to unfair and unreasonable contractual
practice.
5.2
Should All Fuels contention be correct, which is disputed by [Former Way], that it
is not bound by the 5 year (with 5 year renewal option) concluded with [Former Way] ,
then it is contended that it is obliged to treat [Former Way] as Chevron would.
5.3
The understanding that the agreement between Chevron and their Branded
Marketers which includes All Fuels contains a clause which states that Branded Marketers
are not allowed to treat their retailers differently from the way Chevron treats their retailers.
Currently Chevron allows its retailers the opportunity to sell their businesses where there
is no extension of the agreement. All Fuels allowed Tomdia to sell its business to [Former
Way] but now will not allow [Former Way] to sell.
5.4
The claiming of an excessive royalty by All Fuels is also a huge departure from the
norm where oil companies simply extend the retailers tenure in the business without
requesting capital if they were happy with their performance. If oil companies are not

willing to renew the relationship, they allow the business to be sold by the existing retailer
to the incoming retailer.
5.5
Additionally, All Fuels’ failure to keep the property and relevant equipment in an
optimal functioning order is contrary to Chevron standards and has caused the retailer to
suffer financial loss.’

[28] The reference to arbitration was relied upon before the high court to
move for a stay of the eviction proceedings. Before this court Former Way
contended that the effect of a referral to arbitration was to oust the high court’s
jurisdiction. Before turning to the merits of this argument I wish to highlight
an important concession made by counsel for Former Way, namely that
Former Way was not seeking an equitable order at arbitration by which the
arbitrator would fashion a franchise agreement for the parties. Instead the
arbitrator would be required to make a factual determination regarding the
existence of the new franchise agreement. This concession, given the
discussion of the new agreement defence above, effectively disposes of
reliance upon the argument for a stay of proceedings. That is so because there
is little or no prospect of success of establishing the factual defence at the
arbitration.

[29] What remains then is the question whether the referral to arbitration in
terms of s 12 B of the Act ousted the high court’s jurisdiction. In developing
the argument counsel relied upon the language of s 12B and placed great store
on the Constitutional Court judgment in Business Zone 1010 CC t/a
Emmarentia Convenience Centre v Engen Petroleum Limited and others
(‘Business Zone’).5

5  Business Zone 1010 CC t/a Emmarentia Convenience Centre v Engen Petroleum Limited and others
[2017] ZACC 2; 2017 (6) BCLR 773 CC.

[30] The relevant portions of s 12B read as follows:
‘(1) The Controller of Petroleum Products may on request by a licensed retailer alleging
an unfair or unreasonable contractual practice by a licensed wholesaler, or vice versa,
require, by notice in writing to the parties concerned, that the parties submit the matter to
arbitration.
…
(4) An arbitrator contemplated in subsection (2) or (3) –
(a) shall determine whether the alleged contractual practices concerned are unfair or
unreasonable and, if so, shall make such award as he or she deems necessary to correct
such practice; and
(b) shall determine whether the allegations giving rise to the arbitration were frivolous or
capricious and, if so shall make such award as he or she deems necessary to compensate
any party affected by such allegations;
(5) Any award made by an arbitrator contemplated in this section shall be final and binding
upon the parties concerned and may, at the arbitrator’s discretion. Include any order as to
costs to be borne by one or more of the parties concerned.’

[31] It was submitted that the word ‘shall’ in subsections (4) and (5) pointed
to the peremptory nature of the arbitral proceedings. In particular, the fact that
an award was ‘final and binding’ suggested that once a matter had been
referred to arbitration the arbitration outcome was definitive, to the exclusion
of what may flow from court proceedings, save to the extent that the award
may be subject to review. This latter was a weak point since all arbitrations
under the Arbitration Act are final and binding unless set aside on review.

[32] The Act contains no provision which, in unequivocal terms, ousts the
jurisdiction of a court of law. Whether it does indeed oust the court’s
jurisdiction is therefore a matter of construction and interpretation.  In
deciding whether the legislative provision ousts the court’s jurisdiction, all

circumstances must be considered to determine whether the necessary
implication arises that its jurisdiction is either wholly or partially excluded.6

[33] The circumstance relied upon in this instance related to the purpose of
the provision and the general purpose of the Act, namely to foster
transformation of the petroleum products industry. It was submitted that the
Act fostered transformation of the petroleum industry by introducing a
standard of reasonable and equitable conduct in dealings between wholesalers
and retailers of petroleum products. This equitable standard was to be applied
in the resolution of disputes via arbitration. When viewed in this light, so it
was argued, the machinery for dispute resolution created by the Act applied
exclusively. It was suggested that this was the ratio of the judgment in
Business Zone.7

[34] Business Zone however, concerned a problem quite different to the
matter before this court. In that matter the Controller had refused a request to
refer a dispute regarding the cancellation of an agreement to arbitration. What
was at issue was whether a single act of cancellation could constitute an unfair
contractual practice within the meaning of s 12B. The court was accordingly
called upon to interpret the section having regard to the purpose sought to be
achieved thereby and by the Act in general. The Constitutional Court found
that an act of cancellation could constitute an unfair contractual practice. The
Controller could therefore refer the termination of an agreement to arbitration
and should have done so.

6 South African Technical; Officials’ Association v President of the Industrial Court and Others 1985 (1)
SA 597 (A) at 613A-E.
7 Business Zone (above fn 5).

[35] That finding is not itself relevant to the present case, but the
Constitutional Court's view of what constitutes a contractual practice for the
purpose of the Act is important. It made it clear that although the arbitrator in
an arbitration under s 12B applies a standard informed by fairness and
reasonableness, which foreshadows the possibility that they may invalidate
conduct that strictly speaking is permitted by the contract, their jurisdiction
does not extend to making a contract for the parties other than the one they
actually concluded. This emerges from the following passage in the
judgment:8
‘… the arbitrator’s remedial powers can go no further than correcting the contractual
practice in question. The interests of third parties are protected in the section 12B
arbitration process, the subject matter of which is limited to a “contractual practice”. This
presumes that remedying the dispute lies squarely within the contractual rights and
obligations of the parties to the contract.’

[36] This finding no doubt informed the concession referred to above and
disposed of an issue that was unclear from the request for arbitration and the
reference itself, as well as the heads of argument. This was whether Former
Way was contending that the arbitrator could in the exercise of their
jurisdiction order All Fuels to conclude a franchise agreement on terms
determined by the arbitrator, if as a matter of fact the parties had not concluded
such an agreement, but had a non-binding understanding or arrangement
falling short of a binding contract.9 Whether or not that was what Former Way
and its advisers had in mind when the request for arbitration was made, the
Constitutional Court has made it clear that the powers of an arbitrator are to

8 Business Zone para 92.
9 Cf. Consolidated Frame Cotton Corporation Ltd v Minister of Manpower and others 1985 (1) SA 191 (D)
at 197H-199H.

be exercised within the framework of the contractual relationship between the
parties and do not extend to making a contract for them.

[37] Counsel’s reliance on the judgment was based on the Constitutional
Court’s treatment of the introduction of a normative equitable standard in
arbitral proceedings under s 12B of the Act. The reliance was misplaced. The
Constitutional Court dealt with the notional ‘conflict’ between court
adjudication of disputes and arbitral dispute resolution based on an equitable
standard with reference to an assessment of similar developments under the
Labour Relations Act 66 of 1995 and Rental Housing Act 50 of 1999.  The
Constitutional Court concluded that no such conflict arises since there is no
reason why a normative equitable standard should not also apply to court
adjudication.10

[38] This conclusion militates against a finding that arbitration proceedings
provided for in s 12B of the Act serve as an exclusive forum for the
adjudication of disputes arising between wholesalers and retailers of
petroleum products. That such arbitral proceedings do not constitute an
exclusive mechanism for dispute resolution appears from the following
passage in the Constitutional Court’s judgment.
‘Section 12B arbitration presents an additional route for licensed retailers and wholesalers
alike to have their disputes adjudicated quicker within rules and processes of their own
design. Section 12B offers a statutory guarantee of a mechanism that has become
ubiquitous in contract, which may otherwise not exist possibly due to the unequal
bargaining position retailers vis a vis wholesalers find themselves in. Reliance on the
section 12B arbitration procedure can more accurately be understood as arbitration is

10 Business Zone para 52.

ordinarily in contract: it suspends the institution of court litigation.  In turn the section 12B
arbitral mechanism is insulated from becoming a mere preliminary, strategic step to court
litigation in that section 12B (5) speaks to the finality of such an award.’ 11

[39] Counsel for Former Way sought to suggest that the reference to
arbitration ‘suspend(ing) the institution of court litigation’ pointed to an ouster
of jurisdiction. This contention was unsound. The footnote to that passage in
the judgment of Mhlantla J refers to s 6 of the Arbitration Act 42 of 1965 and
the power of a court to stay judicial proceedings in favour of arbitration. Those
provisions are applicable to statutory arbitrations by virtue of s 40 of the
Arbitration Act. It is therefore apparent that Mhlantla J had in mind the
conventional situation where a party may seek a stay of litigation pending
arbitration, not an automatic stay of litigation in favour of arbitration under
s 12B. That is also clear from the following statement in para 56 of that
judgment:
'Forum-shopping between these two different systems of law applied in different
institutions will disappear. Instead, what remains is only the choice of arbitration rather
than adjudication in the courts, a procedure well known to our law.'

[40] There are accordingly no circumstances which warrant a finding that a
referral to arbitration under s12B of the Act ousts the court’s jurisdiction to
adjudicate a dispute. Where, as in this instance, the referral to arbitration
occurred after commencement of the litigation it fell within the discretion of
the court below to stay proceedings pending the arbitration. The judge in the
high court exercised her discretion in refusing a stay. It was not argued that
she misdirected herself in doing so or that her decision was so patently flawed

11  Business Zone para 58.

that we were free to depart from it. There was no basis for a stay pending the
arbitration under s 12B. The issue in the arbitration turned out to be the very
same issue as that before the high court, namely whether the parties had
concluded a binding agreement in regard to a new franchise agreement for a
period of five years from 1 March 2015, with an option of renewal for a further
five years. That was an issue where Former Way bore the onus in the high
court and failed to discharge it. In essence they were seeking to reargue the
same issue in another forum. That was the very kind of forum shopping that
the Constitutional Court said did not arise under s 12B.

[41] Other than the issue relating to the alleged new franchise agreement
none of the issues raised in the arbitration concerned Former Way's
entitlement to remain in occupation of the premises. In the high court it failed
to discharge the onus of proving a right to remain in occupation enforceable
against All Fuels. Its continued occupation without a legal right to do so
infringed All Fuels’ constitutionally protected right not to be deprived of
property except in terms of a law of general application. The reference to
arbitration under the Act did not alter that situation or give it a right that it did
not otherwise enjoy. There is accordingly nothing in the referral to arbitration
argument justifying a departure from the original view taken by the two judges
of this court to dismiss the application for leave to appeal.

Conclusion
[42] As noted at the outset this matter concerned the reconsideration of a
refusal, on petition, to grant the applicant leave to appeal the order of the high
court.  The merits of the appeal were considered only for purposes of

determining whether there was a reasonable prospect of success. For the
reasons set out no such reasonable prospect exists. There are also no
compelling circumstances why leave to appeal should be granted. It follows
therefore that after reconsideration of this court’s decision to refuse leave to
appeal there is no need to vary it and it should be confirmed.

[43] In the result:
1. The order of this court dismissing the application for leave to appeal is
confirmed.
2. The applicant is ordered to pay the costs of the application for leave to
appeal and its reconsideration, such costs to include those consequent upon
the employment of two counsel.

________________________
GOOSEN AJA
ACTING JUDGE OF APPEAL

Appearances

For appellant:
B G Savvas

Instructed by:

K Swart & Company, Durban

Honey Attorneys, Bloemfontein

For respondent:
G D Harpur SC (with him D Ramdhani SC)

Instructed by:
Norton Rose Fulbright, Durban
Webbers Attorneys, Bloemfontein
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT
OF APPEAL

FROM:
The Registrar, Supreme Court of Appeal
DATE:             1 October 2020
STATUS:
Immediate

Please note that the media summary is intended for the benefit of the media and does not
form part of the judgment of the Supreme Court of Appeal.

Former Way Trade & Invest (Pty) Ltd v Bright Idea Projects 66 (Pty) Ltd (1341/2018)
[2020] ZASCA 118 (1 October 2020)

The Supreme Court of Appeal (the SCA) today confirmed an order by two judges of the
SCA refusing Former Way Trade & Invest (Pty) Ltd (Former Way) leave to appeal against
its conviction from premises owned by Bright Idea Projects 66 (Pty) Ltd (All Fuels).

The eviction proceedings arose as a result of the termination of a franchise agreement
which had been ceded to Former Way. The franchise agreement allowed Former Way to
operate a fuel retail business (Premier Service Station) from premises in Pietermaritzburg.
When the franchise agreement ended on 31 December 2017, Former Way refused to vacate
the property. It claimed that it was entitled to receive a new agreement allowing it to operate
the business until 2020 and at its option for a further five years thereafter. It also referred
a dispute with All Fuels to arbitration in terms of the Petroleum Products Act, 120 of 1977.

The high court found that Former Way had not established that a new franchise agreement
had been concluded. It refused to stay the proceedings and ordered Former Way to vacate
the property. The high court refused leave to appeal.

Former Way brought an application to the SCA for leave to appeal, which two judges
refused.  Former Way's application for reconsideration of that decision was referred to the
court.

The SCA held that there was no reasonable prospect of Former Way disturbing the high
court's finding that it had failed to establish that a new franchise agreement had been
concluded. It therefore had no right of continued occupation of the premises and it refusal
to vacate the property was unlawful. The SCA also held that a referral to arbitration in
terms of s 12B of the Petroleum Products Act did not oust the court’s jurisdiction to
adjudicate the dispute. It found that the high court had correctly exercised its discretion to
refuse the stay of proceedings. Former Way was ordered to pay the costs of the application
for leave to appeal and the costs of the reconsideration application.