By Duncan Wild on 4 July 2015

The matter involves a determination of whether the holder of a petroleum products licence can be evicted from the property at which it holds the licence. 

The applicant, Mighty Solutions CC t/a Orlando Service Station, conducts business as a petroleum products retailer. In 2005, Mighty Solutions entered into a contract with Engen Petroleum Limited in terms of which it: (1) sub-leased premises, (2) licensed the use of Engen’s brand, and (3) loaned certain equipment from Engen.

Engen had leased the property from its registered owner, and sub-leased it to the Mighty Solutions. Mighty Solutions holds a petroleum products retail licence, under which it may sell petroleum products to the public from the premises.

The lease between Mighty Solutions and Engen was cancelled in 2009. Engen subsequently brought an application for the eviction of Mighty Solutions. Mighty Solution resists the application on two grounds (1) that Engen does not have the right to evict Mighty Solutions because it does not itself have the right to occupy the premises; and (2) despite the absence of a lease, it holds a right to occupy the premises based on an “enrichment lien” (it claims it has generated goodwill that is associated with the premises, and if not compensated for this goodwill, can maintain occupation of the property).

On the first leg of its argument, Mighty Solutions claims that the main lease under which Engen leases the premises from the owner expired in 2011, and further that as a petroleum products retail licence holder it is the only party with the right to use the premises to sell petroleum products. The High Court rejected this argument on the grounds of the established principle of law that a lessee may not resist an application for eviction by challenging the lessor’s right to occupy the land. In addition, the High Court found that holding a petroleum products retail licence did not grant its holder a special status as lessee.

The second leg was not dealt with by the judgment in the High Court, and seems to have been introduced for the first time before the Constitutional Court.

The case is important for how it deals with the rights of lessors to evict the holders of petroleum product retail licences.

Documents:

Mighty Solutions CC Written Submissions

Documents will be updated as they become available.