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[2020] ZAWCHC 19
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Venfolo NO v Western Cape Liquor Board and Another (6208/2019) [2020] ZAWCHC 19 (31 January 2020)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case
Number: 6208/2019
In
the matter between:
Mbeko Venfolo N.O.
Applicant
And
Western Cape Liquor
Board
First Respondent
Chief Executive
Officer of the Western Cape Liquor Licensing Board
Second Respondent
JUDGMENT
DELIVERED ON 31 JANUARY 2020
BAARTMAN,
J
[1]
On 17 December 2019, I made the following order and indicated that my
reasons, which appear below, would follow.
‘
The Applicant had
timeously paid the licence renewal fee of 100% penalty for 2019 as
contemplated in Section 62(3)(a)(ii) of the
Western Cape Liquor Act,
4 of 2008 (
the Act
), on 28 February 2019, in respect of the
premises at 21 Washington Street, Langa (
the premises
), and
that the liquor licence became valid again on 28 February 2019.
The Western Cape Liquor
Board and/or the appropriate Western Cape liquor licence authority is
directed to update their records to
reflect the Applicant as the
holder of a valid liquor licence for the premises.
The costs occasioned by
the postponements on 15 April 2019 and 5 November 2019 are costs
in the cause.
The Respondents are
directed to pay the Applicant’s costs including the costs of 2
counsel.’
[2]
The chronology of events that led to this litigation, which I deal
with to the extent necessary, was largely common cause. A
liquor
licence was issued to Mr Soxuza and Mr Xashimba in October 2009. The
licence was issued for the premises situated at 21
Washington Street,
Langa in the Western Cape (
the tavern
). Since 10 August 2012,
Mr Soxuza has been the sole holder of the licence for the
tavern. In 2013, Mr Lin Shui (
Shui
) was working at the tavern.
[3]
Licence renewal notices were posted to the tavern in October 2013 and
October 2014 for the 2014 and 2015 renewals. Similarly,
in October
2015, the renewal notice for 2016 was posted to the tavern. At the
time a R3 000 fee was due and paid timeously.
On 9 January 2016,
Mr Soxuza died and Mr Venfolo was appointed as the executor of his
deceased estate. In October 2016, the renewal
notice for the 2017
year was posted to the tavern. The renewal fee was still R3 000.
[4]
However, in
June 2017, the respondents brought an application to suspend/revoke
the licence relevant to this matter. A hearing followed
but the
tribunal’s judgment has been outstanding since December 2017.
It was still outstanding at the date of the hearing
of this
application. Nevertheless, on 11 August 2017, the applicant applied
for the transfer of the licence to Ms Vaphi (
Vaphi
)
[1]
.
That application too was still unsolved at the date of this hearing.
[5]
In November 2017, at a meeting held at the Langa police station,
tavern licence holders in the area were informed that the renewal
fee
had increased from R3 000 to R4 000 for the 2018 renewal.
Vaphi paid the fee and took proof of payment to the ‘offices
of
the WC Liquor Board in Bellville’. She learnt from the
receptionist that the board had ‘forgotten to send a notice
to
the tavern for that year…’ The receptionist belatedly
handed her a copy of the notice. The belated notice also
informed
‘that the licence holder could pay two years’ worth of
fees, namely for 2018 and for 2019, in the sum of R4 000
per
year, if paid by 31 December 2017. The applicant elected not to take
up the offer as he envisaged that the licence would be
transferred
before the next renewal was due.
[6]
In January 2019, Sergeant Mapolisa, the area designated liquor
officer, and an official from the Western Cape Liquor Board attended
the tavern to conduct a routine inspection. Shui gave them the
receipt for R4 000 as proof that the 2019 licence had been
paid.
The official raised no concern after inspection of the receipt.
[7]
On 27
February 2019, Ms Amanda Ackerman (
Ackerman
),
an official in the employ of the first respondent, telephonically
informed the applicant that the licence fee had increased to
R4 360
and that their records reflected that the applicant had only paid
R4 000 and was therefore liable to pay 100%
penalty. On 28
February 2019, the applicant paid R800 to settle the penalty. He did
so as he understood that the penalty related
to the unpaid amount of
R360. However, on 14 March, Ackerman, in email correspondence,
indicated that the penalty pertained
to the entire fee not just the
unpaid portion. It follows that the applicant had to pay R8 720
instead of R800 to revive the
tavern’s licence. Although the
applicant disagreed with the calculation, he paid a further amount of
R5 000 to the respondents
and submitted a condonation
application. In terms of the Liquor Act
[2]
,
the applicant had until 31 March 2019 to apply for condonation.
However, the condonation application was only launched on 11 April
2019 and it was therefore declined
[3]
,
correctly so.
[8]
Against that background, the tavern’s licence was considered
expired and it could not operate lawfully. The applicant,
in its
amended notice, applied for the main relief and certain alternatives.
I granted the main relief which is premised on an
interpretation of
section 62(3)(a)(ii) of the Liquor Act. The relevant sections
provide:
‘
62(2)(b) a licence
lapses – on 1 January of the year in respect of which the
applicable fees prescribed are not paid on or
before 31 December of
the preceding year; …
(3) A licence which has
lapsed, and the rights, privileges, obligations and liabilities which
were attached thereto immediately
before the date on which it lapsed,
become valid again on the date on which –
(a) where the license has
lapsed under the circumstances contemplated in subsection (2)(b), the
fees so contemplated –
(i)…
(ii)
plus a penalty of 100% are paid between the first and the last day of
February of the year in respect of which those fees should
have been
paid; ...’
[9]
It is common cause that as at 31 December 2018, the applicant had
only paid R4 000 and that an amount of R360 was outstanding
in
respect of the renewal fee due for 2019. It follows that the licence
lapsed on 1 January 2019. However, it could be revived
by payment of
a 100% penalty ‘between the first and last day of February
2019’. The applicant paid the penalty in respect
of the arrears
on 28 February 2019. It follows that if the penalty related only to
the arrears that the applicant’s licence
revived on 28 February
2019. However, if the penalty related to the entire fee irrespective
of any amount timeously paid, the applicant’s
licence had
lapsed and was not revived by the payment on 28 February 2019. That
is the issue which I determined in the applicant’s
favour.
[10]
The
respondent contended that the penalty applied to the entire fee and
did not take into account any amount timeously paid. The
purpose of
the penalty provision would be hamstrung, so the submission went, if
the penalty applied only to the unpaid portion
of the fee as it ‘may
amount to a nominal penalty’. I find that submission untenable.
The respondents further submitted
that it would cause administrative
difficulty to determine the amount due in respect of the penalty if
it applied only to the unpaid
portion of the fee. There is no merit
in that submission, the mathematical calculation involved is basic.
Even if the calculation
involved complicated mathematical
calculations, which this case does not, it would not justify an
interpretation so untenable and
contrary to the basic principles
[4]
.
[11]
A lapsed licence, in terms of subsection (2)(b), becomes valid again
on the date on which ‘
the fees so contemplated…plus a
penalty of 100% are paid…in respect of which those fees should
have been paid.’
Literally interpreted, the penalty
must apply to that amount which should have been paid but was not. In
this case, it was R360
that remained unpaid and not R4 360. By
31 December 2018, R4 000 had been paid and could not have
attracted a penalty
but the balance of R360 was admittedly
outstanding and attracted the 100% penalty. It follows that on the
literal interpretation,
the applicant was entitled to the main
relief. Even if I am wrong, the context and purpose of the Liquor Act
support the interpretation
advanced.
[12]
The Liquor
Act aims to regulate the sale of liquor in an orderly manner within
the Western Cape. It clearly envisages that only
licence holders are
entitled to sell liquor. In an attempt to ensure compliance, licence
holders are encouraged to pay their licence
fees timeously.
Therefore, the penalties for late payment increase incrementally
depending on whether the fees are paid in January,
February or
March
[5]
. It is important to
bear in mind that the regulations pertain to the formal and
relatively informal sector. It would certainly
be harsh to penalise a
small trader who in difficult circumstances pays the bulk of its fees
with a 100% or even 50% of the entire
fee when the trader has made
payment within its ability timeously. That would potentially exclude
small taverns in disadvantaged
areas despite an attempt to be
compliant. That would frustrate the purpose of the Act. Cameron J
[6]
said the following for a unanimous court:
‘
[44] But,
fortunately, we live in a constitutional state. And that makes the
Constitution supreme. The position under the common
law provides but
a useful backdrop to the process of interpreting section 118(3) in
accordance with and in the light of the Constitution.
If there is any
doubt about the meaning of the section, that doubt must be resolved
to accord best with the spirit, purport and
objects of the Bill of
Rights. Since Hyundai, all legislation must be approached through the
prism of the Bill of Rights. And it
has been “gold-plate
doctrine” in this Court that, if a meaning conformable with the
Bill of Rights can reasonably
be ascribed to legislation, that
meaning must be embraced, rather than one that offends the
Constitution. …’
[13]
Following the above approach, the question ‘whether the values
and rights in the Constitution’ lead to the conclusion
that the
penalty referred to in the Liquor Act pertains also to amounts
timeously paid must be answered in the negative. As
indicated
above, the Act goes to some length to encourage timeous payment by
incrementally increasing the penalty. This accords
with the purpose
of the legislation and considers the position of less formal traders,
especially those in less affluent areas.
The consequences of imposing
the penalty on amounts timeously paid can be severe, as the facts in
this matter illustrate. The licence
holder, if unable to pay the
penalty in respect of amounts timeously paid, loses its licence. If
unable to trade, the business
will probably have to retrench staff.
In addition, its stock may be confiscated, as happened in this
matter, and the applicant
had to approach this court for the release
of its stock.
[14]
In
interpreting legislation, a court must promote the spirit, purport
and objects of the Bill of Rights
[7]
.
I have no doubt that result is achieved by interpreting section
62(3)(a)(ii) of the Liquor Act so that the penalty pertains only
to
the unpaid portion of the fee payable. That interpretation is
supported by the wording of section 63(4) which provides an
opportunity
to a licence holder who has made no payments by February
to apply in writing on or before 31 March of that year to the Chief
Executive
Officer (
the
CEO
)
for condonation. The CEO may condone the non-payment and allow the
late payment subject to payment of the renewal fee plus 150%
penalty
thereon. It would be anomalous to impose a penalty on the whole
amount in the case of non-payment as well as in instances
of part
payment, irrespective of the amount already paid. In this matter, the
bulk of the fee, R4 000, had been paid leaving
a small arrears
of R360.
Conclusion
[15]
I am persuaded that the literal and purposive approach to the
interpretation of the relevant section seen through the prism
of the
Constitution leads to the conclusion that the penalty applies to the
unpaid portion of the fee payable.
[16]
I have indicated that the applicant had claimed alternative relief
should it not succeed in the main. The alternatives are:
(a) the legitimate
expectation point;
(b) the review point;
(c) the constitutional
point.
[17]
I do not deem it necessary to deal with the alternative relief as I
am persuaded that the applicant was entitled to succeed
on the main
relief, save to add that I found no merit in any of the alternatives.
_____________________________
BAARTMAN
J
[1]
Section 65(1) of the Western Cape Liquor Act, 4 of 2008.
[2]
[2]
Section 62(3) (a) (ii) of the Western Cape Liquor Act.
[3]
Amandla
GCF Construction CC & Another v Municipal Manager, Saldanha Bay
Municipality & Others
2018
(6) SA 63
(WCC) at para 32: ‘
A
principle that can be extracted from the case law above, in relation
to this case, is that there is no general power afforded
to the
Municipality…to extend a statutory time period, except if
that power is conferred on it, as allowed in that particular
section
of the statute. Therefore, if the legislature intended a statute to
operate as an absolute bar, the “general power”,
if
there was any, could not trump that intention
.’
[4]
Bato
Star Fishing (Pty) Ltd v Minister of Environmental Affairs and
Tourism
& Others
[2004] ZACC 15
;
2004 (4) SA 490
(CC) at para 90.
Bastian
Financial Services (Pty) Ltd v General Hendrick Schoeman Primary
School
2008 (5) SA 1
(SCA) at paras 16-19.
Democratic
Alliance v Speaker, National Assembly & Others
2016 (3) SA 487
(CC) at para 28.
[5]
Section 62(3)(a)(i) & (ii) of the Liquor Act provides: ‘where
the licence has lapsed …the fees so contemplated
–
(i) plus a penalty of
50%
are
paid
on or before 31 January; or
(ii) plus a penalty of
100%
are
paid between the first and
that last day of February of the year in respect of which those fees
should have been paid.’
[6]
Jordaan
and Others v City of Tshwane Metropolitan Municipality and Others
[2017] ZACC 31
, at para 44.
[7]
Section 39(2).