---

IN THE HIGH COURT OF SOUTH AFRICA

EASTERN CAPE DIVISION – GRAHAMSTOWN

                                                                                    CASE NOS: 3762/2013 & 4149/2013

                                                                                    DATE HEARD: 29/05/2014

                                                                                    DATE DELIVERED:  17/07/2014

In the matter between

ORYX OIL SOUTH AFRICA (PTY) LIMITED                                                          APPLICANT

and

MO THAN GAS CORPORATION (PTY) LIMITED

trading as MOGAS                                                                                       1^ST RESPONDENT

SIBONGILE DUKADA                                                                                2^ND RESPONDENT

LUNGILE MZAYIYA                                                                                    3^RD RESPONDENT

and

EASIGAS (PTY) LIMITED                                                                                      APPLICANT

and

MO THAN GAS CORPORATION (PTY) LIMITED                    

trading as MOGAS                                                                                       1^ST RESPONDENT

SIBONGILE DUKADA                                                                                2^ND RESPONDENT

LUNGILE MZAYIYA                                                                                    3^RD RESPONDENT

JUDGMENT

ROBERSON J:-

[1] The applicant in case number 3762/2013 (Oryx) and the applicant in case number 4149/2013 (Easigas) both carry on business, inter alia, as wholesale sellers and marketers of industrial and liquefied petroleum gases (LPG), including the distribution of LPG.  The first respondent in both applications (Mogas) carries on business inter alia as a seller and distributor of LPG.  The second and third respondents are directors and employees of Mogas.  Mogas’ principle place of business is at 3 Stand Street, Butterworth, Eastern Cape. 

[2] The applications were made up of Part A and Part B.  Similar relief was sought by the applicants in both matters.  Part A of each application was heard ex parte and in camera and both applicants obtained orders pending the outcome of Part B.  Briefly stated, the terms of the orders were that the respondents were interdicted from filling or distributing LPG cylinders which were the property of the applicants, and the sheriff was directed to list, attach, and remove to a safe storage place any LPG cylinder which was the property of the applicants.  In the Oryx matter the sheriff removed 17 9Kg cylinders, 9 19 Kg cylinders, 7 14 Kg cylinders and 37 48 Kg cylinders.

[3] In Part B of both matters the applicants sought orders in the following terms:

“1.        The cylinders inventoried and attached at the premises as belonging to the applicant are to be released from attachment and returned to possession of the applicant, without the applicant having to refund a deposit.

2.         Interdicting and restraining the first, second and third respondents or any of them, and/or any servant or employee or other person purporting to act on their behalf from receiving or being in possession of any of the applicant’s cylinders.

3.         Interdicting and restraining the first, second and third respondents or any of them, and/or any servant or employee or person purporting to act on their behalf, from filling or distributing any of the applicant’s cylinders.

4.         Alternatively to 2 and 3 above, extending the interim interdict granted in part A of the application, pending final determination of the application, pursuant to a hearing of oral evidence or a trial.

5.         That unless this court directs otherwise, representatives of the applicant be permitted to attend at and to enter upon the premises or any other premises within the jurisdiction of this court from which the first and/or second, and/or third respondents conduct business, on a weekly basis during normal business hours, and that the first and/or second, and/or third respondent be directed to surrender and hand over to the applicant and/or any other person duly authorised thereto by the applicant, any of the applicant’s cylinders and which can be identified as such and/or which carry the applicant’s branding which are in the possession of the first and/or second and/or third respondents.

6.         Failing compliance by the first and/or second, and/or third respondents with the terms of 4 above, the relevant sheriff, (who may be accompanied by a representative of the applicant), is directed to take possession of any of the applicant’s cylinders which are found by the sheriff in the possession of the first and/or second, and/or third respondents at any premises where the first and/or second, and/or third respondents may be trading, or which are found by the sheriff on any vehicle or vehicles which are identified as those of the first and/or second, and/or third respondents, or any of them, or which are being used to convey any such cylinders for or on behalf of the first and/or second, and/or third respondents, either presently or in the future, and whether such cylinders contain LPG or not and that the Sheriff is authorised forthwith to hand these over to the applicant and/or the applicant’s duly authorised representatives.

7.         Ordering the first and/or second, and/or third respondents to return to the applicant all of the applicant’s cylinders in their possession from time to time.

8.         Ordering that the first and/or second, and/or third respondents jointly and severally, the one paying the other to be absolved, pay the applicant’s costs of this application, including the costs of and associated with the ex parte application in terms of Part A hereof, on the scale as between attorney and client.”

[4] Part B of both applications was opposed, and the matters were argued simultaneously.  The foundation of both applications and the allegations of wrongful conduct on the part of the respondents were substantially the same, with only minor differences.  Before dealing with the contents of the affidavits, it is useful to set out some common cause or undisputed facts and certain legislation relating to the LPG industry in South Africa.

[5] There are four major wholesale suppliers of LPG in South Africa:  the two applicants, Totalgas Southern Africa (Pty) Ltd, and African Oxygen Ltd (Afrox).  A major segment of the industry is the “cylinder market”.  For economic reasons, LPG must be stored and distributed in liquid form and extreme pressure is required to convert it to a liquid form.  This necessitates the use of pressure vessels or cylinders which are capable of withstanding such pressure.  LPG is stored in cylinders at extremely high pressures.  The filling of cylinders is a specialised procedure which involves a determination of mass when a cylinder is filled to the specific mass for which it is designed.  Each cylinder is embossed with a “tare mass” and is filled on a scale to the sum of the tare mass and the mass of LPG which the cylinder is designed to contain.  It is essential that a cylinder is filled with the correct gas and is not filled beyond its safety pressure level.  If a cylinder is over-filled or pressurised it is likely to cause damage which in turn is likely to cause leakage or cylinder failure, with harmful results.

[6] Cylinders owned by the applicants (and other owners) are identifiable by a serial number from which it is possible to track the cylinder’s history.  A cylinder’s history is critically important for the purpose of ensuring that the highest levels of safety and operational integrity are maintained in regard to the particular cylinder.  The design, handling, filling, regular maintenance and inspection of cylinders are critical safety matters and are regulated according to statute, regulations and health and safety standards which apply to the handling, filling and distribution of cylinders in South Africa. 

[7] Regulation 17 (1) of the Pressure Equipment Regulations made in terms of s 43 of the Occupational Health and Safety Act 85 of 1993 provides:

“No person shall handle, store or distribute any gas in any manner which includes the filling of a container, other than in accordance with the relevant Health and Safety Standards incorporated into these regulations under Section 44 of the Act.”

During 2009 the Minister of Labour incorporated certain safety standards into the pressure equipment regulations, including South African National Standard (SANS) 10019 issued in terms of s 24 of the Standards Act 8 of 2008.  Clause 9.1.1 of the 2011 version of SANS 10019 provides:

“9.1.1  Permission to fill pressure receptacles

Permission to fill shall be obtained from the owner of the pressure receptacle in writing, except where the pressure receptacle is privately owned by the end user.  This requirement is for safety reasons.  The pressure receptacle containment history is an essential reference for safe filling.”

[8] The Pressure Equipment Regulations and Safety Standards also provide for different types of inspections and safety tests of cylinders, and prohibit the refilling of cylinders which are overdue for inspection and testing.  If end users were to refill cylinders without the permission of the owner, that owner would have no way of monitoring the history of its cylinders.

[9] When a customer or end-user purchases LPG from a supplier or distributor for the first time, the customer is provided with a full cylinder and pays a refundable deposit plus VAT in respect of such cylinder.  Ownership in the cylinder remains vested in the relevant supplier.  There is usually a conspicuous notification on the cylinder that it remains the property of the supplier.  The customer only purchases the content of the cylinder.  If a supplier allowed a customer to purchase a cylinder it would be abdicating its responsibility in relation to safety requirements.

[10] For many years a practice known as the “exchange practice” has existed whereby a supplier or distributor which receives cylinders belonging to another supplier, returns them to that supplier, and receives in exchange its own cylinders which the other supplier may have.  If the number of cylinders exchanged is not equal, the recipient of the greater number of cylinders pays the current deposit value of the excess cylinders.  Suppliers and distributors seldom refill empty cylinders at the time they are returned by the customer:  the customer is provided with an already full cylinder and the empty cylinder is refilled later, but only by an entity authorised to do so.  A distributor who provides an end user with a full cylinder belonging to a supplier on exchange is only permitted to do so with the authorisation of such supplier.  The exchange system ensures that all cylinders and their fittings are on return to the owners inspected for damage or corrosion.  If they are defective, they are repaired or discarded.  The rotation of an owner’s cylinders in the market allows owners to conduct the compulsory inspections. 

[11] One of the negative consequences of the exchange system is that an unauthorised distributor or filler can obtain the applicants’ cylinders and unlawfully use them to supply LPG to the customers of that unauthorised distributor or filler.  The unauthorised distributors do not incur the costs of providing their own cylinders and are able to undercut suppliers and distributors who operate legitimately. 

[12] When the applicants’ cylinders are lawfully filled, they are sealed with shrink wrapping which bears the applicants’ names and logo.  The applicants’ cylinders are identifiable by their colour and logo: green with the logo “BP”[1] or “Oryx Energies” in the case of Oryx, and silver with the logo “Easigas” in the case of Easigas.  Mogas’ cylinders are light orange and bear the logo “Mogas”.

[13] Both applicants have purchased large quantities of cylinders and in order to obtain a return on their capital investment, they rely on the sale of gas supplied in their cylinders and the return of those cylinders.  The ability to service the market depends on an adequate stock of cylinders which are circulated by a distributor or supplier, so that it is able to sell LPG by exchanging full cylinders for empty ones and to supply full cylinders to new customers who do not bring in an empty cylinder for exchange.  It is therefore essential that the applicants’ cylinders remain in circulation and that their empty cylinders are returned to them so that they or their authorised LPG distributors can inspect the cylinders, fill them, and reintroduce them into the market.

ALLEGED UNLAWFUL CONDUCT ON THE PART OF THE RESPONDENTS

[14] Both applicants allege that they experience the problem of unauthorised use of their cylinders, and that such unauthorised conduct causes a shortage of cylinders with which to supply their customers, and deprives them of the economic benefit of the cylinders which they have introduced into the market.  Mogas is not an authorised distributor of the applicants nor do they supply Mogas with bulk LPG. The applicants allege that Mogas is one of those unauthorised distributors which utilises their cylinders to sell its LPG in the cylinder market.

[15] According to the founding affidavits, during September 2013 the applicants received unconfirmed reports that Mogas was illegally filling and distributing the applicants’ cylinders.  They appointed Royal Square Investments CC (RSI), private investigators, to conduct investigations into the reports.  Two of RSI’s employees, Oliphant Mtsweni and Joseph Mohlala travelled to Butterworth on the morning of 14 October 2013.  They first went to the local Spar supermarket where they saw a cage containing a number of full Mogas and Oryx cylinders.  The cylinders had all been sealed with green plastic shrink wrap, which is not the seal of BP or Oryx.  A sign on the wall of the Spar building indicated that “Mogas” was sold there. Photographs taken by Mohlala of the Spar premises were annexed to the Oryx founding affidavit in which the first respondent’s sign on the wall is visible, and which show green cylinders and light orange cylinders stacked in a cage. 

[16] Later that morning Mtsweni and Mohlala went to the first respondent’s premises (referred to as the filling depot) in Butterworth where there was a bulk filling tank.  From their observations, they concluded that the filling depot is used to fill portable LPG cylinders with LPG which are distributed to other locations.  They also concluded that the depot serves as an initial distribution point from which the first respondent supplies full portable LPG cylinders to containers and that the first respondent does not sell LPG to end users from the depot.  Mtsweni and Mohlala further observed that the first respondent was filling and distributing cylinders belonging to other suppliers, amongst whom were the applicants, on a large scale.  Further photographs taken at the first respondent’s premises were annexed to both affidavits, which according to the deponents showed:  cylinders belonging to the applicants and Afrox stacked next to the filling station; a Mogas truck at the filling depot after having offloaded a number of cylinders including those of the applicants; cylinders belonging to the applicants in the vicinity of the Mogas truck; employees of Mogas filling cylinders belonging to the applicants; cylinders belonging to the applicants stored inside the yard at the filling depot; a Mogas truck containing cylinders belonging to the applicants; and a Mogas truck leaving the premises containing cylinders belonging to Easigas.  Mtsweni and Mohlala also observed Mogas trucks going to and from the filling depot carrying cylinders belonging to the applicants.

[17] On 16 October 2013 Mohlala and a local investigator, Steven Moyo, went to the filling depot and observed that Mogas’ employees were offloading, filling and loading cylinders belonging to the applicants.  As Mohlala and Moyo were leaving they were confronted by a security official.  On their way to East London they realised that they were being followed by a blue BMW motor vehicle the driver of which attempted to force them off the road.  They stopped and were confronted by two men whom they believed to be the second and third respondents.  They were asked why they were taking photographs in the vicinity of the filling depot and were threatened that they would be in serious trouble if they were seen there again.

[18] The investigators also found out that Mogas operates containers from which it sells full cylinders, including cylinders belonging to the applicants, to end users in various towns in the Eastern Cape.  These allegations were based on hearsay evidence and the applicants did not pursue relief based on these allegations.          

[19] Confirmatory affidavits of the investigators were annexed.

[20] Both applicants asserted that they are losing incalculable revenue from the unauthorised filling and distributing of their cylinders and that should there be an accident involving one of their cylinders they may face claims for damages and their reputations will be harmed.

[21] Both applicants alleged that the second and third respondents were joint wrongdoers with Mogas because they are directors and effectively in charge of Mogas.  It was alleged that they must be aware that Mogas is earning revenue through the illegal acquisition and filling of the applicants’ cylinders and is obtaining a competitive advantage over lawfully operating suppliers and distributors.

[22] Following these events Easigas’ attorneys wrote to Mogas informing them that they were aware of Mogas’ activities and pointing out, inter alia, that it was illegal to fill a cylinder unless duly authorised.  Mogas was put on terms to provide an undertaking that it would no longer fill Easigas’ cylinders and no longer deal in its illegally filled cylinders.  Mogas responded with a letter signed by the third respondent (Mzayiya) in which it was denied that Mogas was filling Easigas cylinders or selling them to end users.    The letter also stated that Mogas had learned that Easigas was illegally refusing to return Mogas cylinders and illegally moving them to Gauteng where Mogas does not trade, in order to try to keep Mogas out of business.  Mogas did not give the requested undertaking.

[23] In the Oryx matter the respondents initially raised a constitutional point to the effect that the safety regulation requiring the written consent of the owner of a cylinder was unconstitutional in that it impacted on the respondents’ rights to equality and to freedom of trade, occupation and profession.  This constitutional point was abandoned.

[24] The answering affidavit in both matters was deposed to by Mzayiya.  It was admitted that Mogas is not an authorised distributor of either of the applicants.  In the Oryx matter Mzayiya admitted that the filling depot at Mogas’ premises is used to fill LPG into portable LPG cylinders which are distributed to other locations and that the depot is the initial distribution point from which Mogas supplies full portable LPG cylinders to containers and does not sell LPG to end users at the depot.  In the Easigas matter this allegation was denied.  The allegations pertaining to unauthorised filling and distribution of the applicants’ cylinders were denied.  Mzayiya stated in general that the applicants had provided no evidence that Mogas was filling the applicants’ cylinders.   The photographs and information available to the court were vague and the applicants had drawn conclusions and made assumptions without proof.  In relation to the RSI’s investigations, Mzayiya denied knowledge of the appointment of RSI and put the applicants to the proof thereof.  He stated that there was no reference in the evidence as to who conducted the inspections, when they were conducted, who took the photographs, when they were taken and how they were processed.  In addition the evidence and the photographs provided no objective proof that Mogas was infringing the pressure equipment regulations or not abiding by the exchange practice.  The cylinders in the photographs were not identifiable nor were Mogas’ premises depicted in the photographs.  In a more specific response to the photographs taken on 14 October 2013 Mzayiya said that the photographs only depicted the presence of cylinders on Mogas’ premises and did not indicate any unlawful activity on the part of Mogas. 

[25] In the Oryx matter Mzayiya said that Oryx had failed to allege the details of the individual who informed it that Mogas supplies LPG cylinders to Spar and that no nexus had been established between the cylinders present at Spar and the conduct of Mogas.

[26] With regard to the allegation that Mogas trucks were seen travelling to and from Mogas’ premises containing the applicants’ cylinders, Mzayiya said that this allegation provided no evidence of wrongdoing and that he failed to see how the investigators could know what the contents of the trucks were without a proper inspection.

[27] Mzayiya’s response to the allegations of what was observed and photographed on 16 October 2013 was to deny that the photographs depicted the filling of the applicants’ cylinders.  The allegation that the investigators were confronted by a security guard was denied, as was the allegation that they were followed by the BMW and threatened. 

[28] With reference to the relevant legislation, Mzayiya was of the view that there was no provision preventing Mogas from coming into possession of the applicants’ cylinders.  In alleging that the unauthorised filling of cylinders was unlawful, the applicants were conceding that an alternative remedy was available to them, namely reliance on the police or the relevant government department who have the right to enforce the prohibition.  The applicants therefore, so it was stated, had no prima facie right to enforce the provisions of the pressure equipment regulations.

[29] Mzayiya went on to say that the applicants did not provide proof that Mogas was not adhering to the exchange practice.  Mogas commenced business during May 2011 and its members have been involved in the LPG industry for a long time.  Mogas invested a substantial amount of capital in purchasing its own cylinders and establishing itself as a LPG provider in the Eastern Cape area.  It conducts business from various towns and premises.  Mogas is competing with the applicants on a major scale and is a threat to them.  Mogas has at all times adhered to the exchange practice:  it makes cylinders available in terms of the practice and it has introduced its own cylinders into the market and needs to adhere to the exchange system so that its cylinders can be returned to it.  In a supplementary affidavit in the Easigas matter which I allowed to be admitted, Mzayiya annexed some delivery notes from Tembuland Gas (Pty) Ltd which indicated that empty cylinders had been delivered to and collected from Mogas.  Mzayiya stated that the cylinders collected were those of Easigas and that Tembuland Gas was a distributor of Easigas.  Also in the Easigas matter, Mzayiya alleged that Easigas was itself retaining Mogas’ cylinders at depots under its control and refusing to return them.  A photograph in support of this allegation was attached, which shows a number of light orange cylinders behind wire fencing.  This allegation was denied in reply.

[30] Mzayiya referred to various items of proof that Mogas is not engaged in unsafe practices, including cylinder verification certificates, Mogas’ wholesale licence, a certificate of compliance with the Occupational Health and Safety Act and certificates of training of Mogas’ employees.  Mogas complies with every safety requirement imposed by the Pressure Equipment Regulations and the applicants’ concerns about the safety aspect of the written consent requirement should thereby be allayed.  Mzayiya suggested that less restrictive means to ensure safety are available, namely a practice whereby a supplier maintains records of each cylinder received, exchanged, filled and maintained, and such records must be made available to a public authority or the owner of the cylinder.      

[31] Mzayiya said that the applicants placed no evidence before the court that Mogas has refrained from returning empty cylinders to suppliers when requested.  Mogas has complied with requests from suppliers to return empty cylinders against payment of a deposit.  Neither of the applicants alleged that it had made any attempt to collect its cylinders from Mogas before launching the applications.

[32] With regard to the allegations of proprietary loss, Mzayisa said that such loss is cured by the deposit and exchange system and can be further prevented by an arrangement to the effect that a supplier makes payment to the applicants for each cylinder handled.  The current practice makes it impossible for a local business such as Mogas to gain access to the market without a supplier’s consent.  The major suppliers all act in this manner and members of the public are unable to enjoy the benefits of a competitive environment when purchasing LPG.  While not suggesting that the applicants be compelled to contract with Mogas, Mzayiya said that the nature of the exchange system and the supply of LPG have resulted in Mogas occasionally using the applicants’ cylinders which it receives from its customers.

[33] Mzayiya denied the allegation that he and the second respondent were joint wrongdoers.

DISCUSSION

[34] I shall deal firstly with the applicants’ allegations of unlawful conduct and the respondents’ various denials, which create an apparent dispute of fact.  I am of the view however that it is not a genuine and bona fide dispute of fact.

[35] In Wightman t/a JW Construction v Headfour (Pty) Ltd and Another [2008] ZASCA 6; 2008 (3) SA 371 (SCA) Heher JA said the following at para [13]:

“A real, genuine and bona fide dispute of fact can exist only where the court is satisfied that the party who purports to raise the dispute has in his affidavit seriously and unambiguously addressed the fact said to be disputed.  There will of course be instances where a bare denial meets the requirement because there is no other way open to the disputing party and nothing more can therefore be expected of him.  But even that may not be sufficient if the fact averred lies purely within the knowledge of the averring party and no basis is laid for disputing the veracity or accuracy of the averment.  When the facts averred are such that the disputing party must necessarily possess knowledge of them and be able to provide an answer (or countervailing evidence) if they be not true or accurate but, instead of doing so, rests his case on a bare or ambiguous denial the court will generally have difficulty in finding that the test is satisfied.  I say ‘generally’ because factual averments seldom stand apart from a broader marix of circumstances all of which needs to be borne in mind when arriving at a decision.”

[36] In the present matters, in my view the respondents did not seriously and unambiguously address the allegations of unlawful conduct when they were in a position to do.  The photographs annexed to the founding affidavits were not submitted in isolation, with the court left to determine what they depicted.  They were linked to the positive allegations of when, where and by whom the photographs were taken, and what was observed by the investigators.  The allegation of the appointment of RSI, the confrontation with the security guard and the incident involving the BMW were all met with a bare denial.  The respondents would have been in a position to counter specifically the latter two allegations.  Very specific details of what was observed by the investigators at Mogas’ premises were set out in the founding affidavits and supported by the photographs.  Merely to counter these allegations by saying that the photographs did not provide objective proof of an infringement of the pressure regulations and that the cylinders in the photographs were not identifiable, was to avoid answering the allegations directly.  The cylinders were identifiable because of their colour.  The distinctive colours of the various suppliers’ cylinders were not in dispute. 

[37] On the one hand Mzayiya said that the photographs did not depict Mogas’ premises, on the other hand he also said that the photographs only showed the presence of cylinders on Mogas’ premises.  Once it was admitted that the photographs were taken at the premises, it would not have been at all difficult for Mzayiya to explain what the photographs did depict, if it was not what the applicants alleged.  The same applied to the response to the allegations of the cylinders observed in Mogas’ trucks.  Mzayiya could easily have said what the trucks contained, if it was not the applicants’ cylinders.  His response to the allegations of Mogas’ activities at the Spar in Butterworth was a challenge to prove a nexus between the presence of Oryx cylinders  there and Mogas.  He seems to have overlooked that the cylinders observed included Mogas cylinders.  He said nothing about the sign on the wall of Spar indicating that Mogas was sold there.

[38] In my view the effect of this manner of answering the applicants’ allegations of unlawful activities was not to create a bona fide genuine dispute of fact.  In that event the applications must be decided on the assumption that the applicants’ accounts of events are substantially true and correct.  (See Wightman t/a JW Construction v Headfour (Pty) Ltd and Another (supra) at para [23].)  Notably the respondents admitted that Mogas occasionally used the applicants’ cylinders.  The fact that none of Easigas’ cylinders were attached in terms of the ex parte order did not assist the respondents.  It did not detract from the evidence of the observations of the investigators and the photographs.

[39] The applicants’ ownership of their cylinders, the retention of ownership, and the practice of the deposit and exchange system were not in dispute.  The respondents admitted Mogas was not an authorised distributor of the applicants.  Once it is accepted that Mogas is filling the applicants’ cylinders without their written permission, and distributing the cylinders, there is little that the respondents could offer to justify their activities.     

[40] Whether or not the respondents adhere to the exchange system or not is irrelevant because it does not have permission to fill and distribute the applicants’ cylinders.  The allegation that Mogas has returned some of Oryx’ empty cylinders does not negate the unlawful conduct of filling and distributing its cylinders.  Notably a considerable quantity of Oryx cylinders were attached and removed by the sheriff.  Considerable quantities of the applicants’ cylinders were visible in some of the photographs.  The respondents, by denying the allegations concerning their use of these cylinders, failed to explain what the cylinders were doing there and what their intention was in regard to those cylinders.  In these circumstances, the complaint that the applicants did not request the return of their cylinders is a hollow one.  While it is correct that there is no regulatory provision preventing Mogas from coming into possession of the applicants’ cylinders, this does not mean that the respondents can illegally deal with those cylinders, nor does it mean that the applicants do not have a right to prevent such possession, if the respondents are unlawfully using the applicants’ cylinders.  The allegation that Easigas is retaining some of Mogas’ cylinders, even if true, cannot prevent Easigas from seeking to protect its rights pertaining to the filling and distribution of its cylinders.  In any event, Mzayiya did not identify the depots where the cylinders were alleged to be nor did the photograph indicate the particular depot where it was taken.   

[41] The argument that the current practice prevents Mogas from gaining access to the market cannot override the safety regulations which are not only law but are also there to prevent harm to customers who purchase LPG.  The respondents’ alternative proposal is not a matter which this court can decide.  Even if Mogas adheres fully to safety practices, this also does not override the regulations. 

[42] The respondents relied on the decision in Laskey and Another v Showzone CC and Others 2007 (2) SA 48 (CPD) in submitting that the applicants did not have a right to enforce the safety regulations.  In that matter Binns-Ward AJ (as he then was) said at 54E-H:

“I, however, think that Mr Fitzgerald SC who, together with Mr Smalberger, appeared for the applicants, was right when he submitted that the matter must be approached on the basis of the principle stated in Patz v Greene & Co 1907 TS 427, read with Roodepoort-Maraisburg Town Council v Eastern Properties (Prop) Ltd 1933 AD 87 at 95 - 6, viz that, when it appears that a statute was enacted in the interests of a particular person or  any class of persons, a party who shows that he or she is one of such persons or such class of persons and seeks judicial intervention by way of the grant of interdictory relief premised on the Act is not required to show harm as a result of the contravention of the statute, such harm being presumed. But that when a statutory duty was imposed, not in the  interest of a particular person or a particular class, but in the public interest generally, the applicant must show that he or she has sustained, or apprehends, actual harm in order to obtain interdictory relief on the grounds of a breach of the statute.”

[43] In the present matters an owner of a cylinder is a party to the regulation because Clause 9.1.1 of SANS 10019 provides that permission to fill must be obtained from the owner of the cylinder.  In any event the applicants’ concern is not merely the safety aspect.  As owners of the cylinders they are accountable for the history of the cylinders and face potential harm to their reputation in the event of an accident involving one of their cylinders.  They have experienced the loss of the return of their cylinders in accordance with the exchange system, with negative economic consequences.

[44] The respondents’ heads of argument raised further defences:  a violation of Mogas’ right to privacy (the activities of the investigators)rendering the evidence inadmissible; entrapment; and estoppel.  Counsel for the respondents did not pursue these defences, correctly so.  The activities observed by the investigators were not claimed to be confidential trade secrets and were conducted on business premises where they could be publicly observed.  No expectation of privacy was claimed.  The purpose of the investigators was to obtain evidence relating only to the illegal use of the applicants’ cylinders.  There were no allegations of entrapment in the answering affidavits, for example that the respondents had been offered some inducement illegally to fill the applicants’ cylinders.  Similarly, with regard to estoppel, there were no allegations in the answering affidavits that the applicants had made representations which caused the respondents to act to their prejudice.

[45] In my view, the applicants were justified in seeking an order against the second and third respondents.  Other than to deny the allegation that they were joint wrongdoers, Mzayiya provided no grounds for absolving them from responsibility.  As directors of Mogas, they conduct its business, which has included the filling and distribution of the applicants’ cylinders from which Mogas has earned revenue, of which they must be aware.  Mzayiya’s evasive response to the allegations of unlawful activities indicated his direct role in the running of Mogas, as did his letter in reply to Easigas’ request for an undertaking, prior to the launching of the ex parte application.

[46] The costs of part A of the applications were to be determined in the part B proceedings.  The use of the ex parte in camera procedure was strongly criticised.  In my view the ex parte procedure was justified.  The respondents were acting illegally.  The confrontation with the security guard at Mogas’ premises and the incident involving the BMW were indications that the respondents did not want their illegal activities to be detected and raised the real possibility that if they had notice of the application they would have concealed or moved the applicants’ cylinders from Mogas’ premises.  In the Easigas matter, the response to the request for an undertaking was a strongly worded denial of the allegations.  Notice of the applications would therefore in my view have defeated their purpose.  The attachments sought were only in respect of the applicants’ own property and did not infringe the respondents’ rights in Mogas’ property.  The orders provided that the sheriff was to explain to the respondents that the applicants tendered compensation for any damages arising from the orders which were proved by the respondents, and that the ex parte applications could be set down for reconsideration on not less than 24 hours’ notice.  The deponents to the founding affidavits alleged that the LPG industry is small and that parties in the industry interact on a daily basis.  If the applications had been placed on the motion court roll they would have come to the attention of persons in the industry, including the respondents.  If that were the case, again, the purpose of the applications would be defeated.  I regard these allegations as sufficient justification for the matters to have been heard in camera.   

[47] In the result I am satisfied that the applicants have established the requirements for the interdicts they seek.  They have a clear right as owners of the cylinders to prevent those cylinders from being illegally filled and distributed and to prevent an unauthorised distributor from retaining their cylinders and using them to supply LPG.  They have demonstrated a well-grounded apprehension of irreparable harm in that there is a risk of damage to their reputation and a claim for damages in the event of an accident involving their cylinders, and they are losing revenue from the unauthorised filling and distribution of their cylinders, which loss is impossible to quantify.  They have no other satisfactory remedy:  their damages for loss of revenue would be impossible to quantify because they have no way of establishing the extent to which their cylinders are being illegally filled and distributed, and, unless checked, the respondents’ conduct would persist.

[48] The applicants sought costs on the attorney and client scale.  I think such costs are warranted.  The respondents knowingly acted in contravention of safety regulations and infringed the applicants’ rights of ownership.  Mogas earned revenue at the expense of the applicants.  The respondents denied such conduct, and persisted with their denial, well knowing that their conduct was illegal.

[49] In case number 3762/2013 the following order will issue:

[49.1]  The cylinders inventoried and attached at the first respondent’s premises as belonging to the applicant are to be released from attachment and returned to the possession of the applicant, without the applicant having to refund a deposit.

[49.2]  The first, second and third respondents or any of them and/or any servant or employee or other person purporting to act on their behalf are   interdicted and restrained from receiving or being in possession of any of the applicant’s liquid petroleum gas cylinders.

[49.3]  The first, second and third respondents or any of them and/or any servant or employee or person purporting to act on their behalf, are interdicted and restrained from filling or distributing any of the applicant’s said cylinders.

[49.4]  Representatives of the applicant are to be permitted to attend at and to enter upon the premises of the first respondent or any other premises within the jurisdiction of this court from which the first, and/or second and/or third respondents conduct business, on a weekly basis during normal business hours, and the first and/or second and/or third respondents are directed to surrender and hand over to the applicant and/or any other person duly authorised thereto by the applicant, any of the applicant’s said cylinders which can be identified as such and/or which carry the applicant’s branding which are in the possession of the first and/or second and/or third respondents.

[49.5]  Failing compliance by the first and/or second and/or third respondents with the terms of paragraph [49.4] above the relevant sheriff, who may be accompanied by a representative of the applicant, is directed to take possession of any of the applicant’s said cylinders which are found by the sheriff in the   possession of the first and/or second and/or third respondents at any premises where the first and/or second and/or third respondents may be trading, or which are found by the sheriff on any vehicle or vehicles which are identified as those of the first and/or second and/or third respondents or which are being used to convey any such cylinders for or on behalf of the first and/or   second and/or third respondents, either presently or in the future, and whether such cylinders contain liquid petroleum gas or not.  The relevant sheriff is further authorised to hand the said cylinders over to the applicant and/or the   applicant’s duly authorised representatives.

[49.6]  The first and/or second and/or third respondents are to return to the applicant all of the applicant’s said cylinders in their possession from time to time.

[49.7]  The first, second and third respondents are ordered to pay the costs of part A and part B of this application on the scale as between attorney and client, the one paying the others to be absolved.

[50] In case number 4149/2013 the following order will issue: 

[50.1]  The first, second and third respondents or any of them and/or any servant or employee or other person purporting to act on their behalf are   interdicted and restrained from receiving or being in possession of any of the applicant’s liquid petroleum gas cylinders.

[50.2]  The first, second and third respondents or any of them and/or any servant or employee or person purporting to act on their behalf, are interdicted    and restrained from filling or distributing any of the applicant’s said cylinders.

[50.3]  Representatives of the applicant are to be permitted to attend at and to enter upon the premises of the first respondent or any other premises within the jurisdiction of this court from which the first, and/or second and/or third respondents conduct business, on a weekly basis during normal business hours, and the first and/or second and/or third respondents are directed to surrender and hand over to the applicant and/or any other person duly authorised thereto by the applicant, any of the applicant’s said cylinders which can be identified as such and/or which carry the applicant’s branding which are in the possession of the first and/or second and/or third respondents.

[50.4]  Failing compliance by the first and/or second and/or third respondents with the terms of paragraph [50.3] above the relevant sheriff, who may be accompanied by a representative of the applicant, is directed to take possession of any of the applicant’s said cylinders which are found by the   sheriff in the possession of the first and/or second and/or third respondents at any premises where the first and/or second and/or third respondents may be trading, or which are found by the sheriff on any vehicle or vehicles which are identified as those of the first and/or second and/or third respondents or which   are being used to convey any such cylinders for or on behalf of the first and/or second and/or third respondents, either presently or in the future, and whether such cylinders contain liquid petroleum gas or not.  The relevant sheriff is     further authorised to hand the said cylinders over to the applicant and/or the      applicant’s duly authorised representatives.

[50.5]  The first and/or second and/or third respondents are to return to the applicant all of the applicant’s said cylinders in their possession from time to time.

[50.6]  The first, second and third respondents are ordered to pay the costs of part A and part B of this application on the scale as between attorney and client, the one paying the others to be absolved.

_____________

J M ROBERSON

JUDGE OF THE HIGH COURT

 

Appearances:

 

For the Applicants:  Adv P Strathern, instructed by Wheeldon Rushmere & Cole , Grahamstown

 

For the Respondents:  Adv C Cremen, instructed by Whitesides Attorneys, Grahamstown

---

---