Seebed CC t/a Siyabonga Convenience Centre v Engen Petroleum Limited

Seebed CC operated an Engen filling station under a lease agreement with Engen Petroleum Limited. The original lease was from 1 April 2008 to 31 May 2010, later extended to 31 July 2015. Seebed alleged an oral agreement for a further five-year extension to 2020, but the written lease contained a whole contract clause. In 2010, Engen introduced a Corner Bakery franchise requiring Seebed's participation. When Seebed refused to sign the franchise agreement with Retsol Stores, Engen purported to cancel the lease and demanded Seebed vacate. Seebed refused and Engen instituted eviction proceedings. First eviction proceedings (September 2012) were based on breach of contract. Seebed defended on grounds of fraudulent misrepresentation about the Corner Bakery's profitability. During the May 2016 hearing, Seebed's counsel conceded that if the extension agreement was invalid due to misrepresentation, the original month-to-month lease arrangement would apply. The matter was referred to trial. After the referral, Engen gave one month's notice on 31 May 2016. Seebed filed a counterclaim in August 2016 asserting a right to occupy until 2020. In October 2016, Engen launched second eviction proceedings relying on Seebed's concession about the month-to-month arrangement. Seebed sought a stay pending section 12B arbitration in June 2017, which was dismissed in July 2018. The High Court evicted Seebed on 31 July 2019, with retrospective effect from 31 July 2017.

• Whether the High Court's jurisdiction was ousted by a pending section 12B arbitration referral under the Petroleum Products Act
• Whether the High Court was required to stay eviction proceedings pending resolution of the section 12B arbitration
• Whether the High Court erred in refusing to accept Seebed's second supplementary answering affidavit filed late without proper explanation
• Whether the High Court erred in rejecting Seebed's lis pendens defence
• Whether the concession made by Seebed's counsel in the first eviction proceedings (that the lease was on a month-to-month basis) was a concession of fact or law
• Whether it was in the interests of justice to grant leave to appeal

1. Leave to appeal is refused. 2. The applicant must pay the respondent's costs in this Court.

1. A referral to arbitration under section 12B of the Petroleum Products Act does not oust the High Court's jurisdiction to determine eviction proceedings between a licensed wholesaler and retailer. 2. Permission to file supplementary affidavits after close of pleadings is a matter of true discretion for the court, and appellate courts will only interfere if the discretion was not exercised judicially, wrong principles were applied, there was a material misdirection, or the decision could not reasonably have been made by a court properly directing itself. 3. A concession made by counsel regarding a factual state of affairs (such as the nature of a lease arrangement) constitutes a concession of fact, not law, and is binding on the party making it. 4. For a lis pendens defence to succeed, the defendant must show pending litigation between the same parties, based on the same cause of action and in respect of the same subject matter. Where issues were not properly pleaded in proceedings, the lis pendens defence cannot succeed. 5. The Constitutional Court will not generally determine novel issues raised for the first time before it, as it would be acting as a court of first and last instance contrary to its appellate function.

The Court noted that even if Seebed had timeously raised allegations about its reasonable expectation that the lease would be extended to 2020, the High Court would not have been in a position to find in favour of Seebed as doing so would have required resolution of the question left open in Former Way Trade regarding the corrective powers of section 12B arbitrators, and would contradict the 'whole agreement' clause in the original lease agreement. The Court cautioned (referring to Crompton) that courts should avoid making stay decisions based on premature assessments of what a section 12B arbitrator would decide, and that prospects of success before the arbitrator should not be given undue weight. The Court observed that the first eviction proceedings (regarding whether Engen lawfully cancelled for breach in November 2011) were rendered academic once Engen relied on termination on notice in May 2016 and the High Court ordered eviction retrospective only to 31 July 2017.

This case clarifies important principles regarding section 12B arbitration under the Petroleum Products Act in the context of eviction proceedings. It confirms that section 12B arbitration does not oust the High Court's jurisdiction and that courts retain discretion whether to stay proceedings pending arbitration. The judgment reinforces procedural principles including: (1) the limited circumstances in which appellate courts will interfere with a lower court's exercise of true discretion; (2) that concessions of fact are binding on parties; (3) the requirements for a successful lis pendens defence; and (4) the principle that the Constitutional Court will generally not determine novel issues raised for the first time before it. The case demonstrates the practical consequences of tactical litigation choices and highlights the importance of pleading all relevant defences at the appropriate procedural stage.