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In dividing the original business between them they had to deal with a tank farm situated in Standerton, which Bothma & Seun were hiring from Omnia Kunsmis Bpk (Omnia) under a contract executed in 1999, but pre-dating that date.
In 2005 a new lease agreement was concluded with Omnia to which both Bothma & Seun and Bothma-Batho were parties.
Bothma-Batho contends that on a proper interpretation of the relevant clause in the second agreement it was entitled to receive the entire benefit from an increase in the rental paid by FFS Refiners to Bothma & Seun during the period from 1 July 2008 to 28 February 2009. It was dismissed by Hancke AJP at first instance and the appeal is with his leave.
It is convenient to start with the first agreement dealing with the allocation and recovery of the operating costs of the tank farm.
The present dispute arose from the separate agreements concluded between Bothma & Seun and Bothma-Batho in relation to the allocation and recovery of expenses incurred in the operation of the Standerton tank farm.
A problem arose in the implementation of clause 7 of the first settlement agreement because Bothma-Batho, instead of furnishing an invoice to Bothma & Seun for the expenses and administration fee, rendered an account directly to FFS Refiners, who paid these accounts and deducted the amount of such payments from the rental that they paid to Bothma & Seun.Bothma en Seun Transport (Edms) Bpk sal die pro rata uitgawe plus 10% bestuursfooi ten opsigte van die bestuur van die stoortenks oorbetaal binne sewe dae na lewering van faktuur van Bothma-Batho Transport (Edms) Bpk welke uitgawes ooreenkomstig die tenkkapasiteit persentasie wat Bothma en Seun Transport (Edms) Bpk se Some aspects of this arrangement are reasonably clear.Bothma- Batho would incur expenses in the management of the tank farm and those costs would be divided between it and Bothma & Seun in proportion to the tank capacity of the tanks that they and their clients respectively used.In addition Bothma & Seuns were to be given free access to the facility to store product in its tanks and to accompany clients there.In practice Bothma-Batho let its tanks to Sasol and Bothma & Seun let its tanks to FFS Refiners.