Garden Route Casino (Pty) Ltd and Others v Premier of the Western Cape and Others (24453/18) [2021] ZAWCHC 124; [2021] 4 All SA 445 (WCC) (2 July 2021)

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[2021] ZAWCHC 124
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Garden Route Casino (Pty) Ltd and Others v Premier of the Western Cape and Others (24453/18) [2021] ZAWCHC 124; [2021] 4 All SA 445 (WCC) (2 July 2021)

THE HIGH COURT OF
SOUTH AFRICA
(WESTERN
CAPE HIGH COURT, CAPE TOWN)
Case
no
:
24453/18
In
the matter between:
GARDEN
ROUTE CASINO (PTY) Ltd
First
Applicant
TSOGO
SUN CALEDON (PTY) Ltd
Second
Applicant
WEST
COAST LEISURE (PTY) Ltd
Third Applicant
and
PREMIER
OF THE WESTERN CAPE
First Respondent
PROVINCIAL
MINISTER OF FINANCE
Second
Respondent
WESTERN
CAPE GAMBLING AND
Third
Respondent
RACING
BOARD
CHAIRPERSON
OF THE WESTERN CAPE
Fourth
Respondent
GAMBLING
AND RACING BOARD
SUNWEST
INTERNATIONAL PTY) LTD
Fifth Respondent
WORCESTER
CASINO (PTY) LIMITED
Sixth Respondent
Delivered
electronically this 2
nd
day of July 2021 by email to the parties.
JUDGMENT
NDITA; J
Introduction
[1]
This application concerns casino and gambling operator licenses. The
relief sought
is best understood against the backdrop of the
legislation governing the issuing of the aforesaid licences. Casinos
and gambling
in the Western Cape are regulated by both national and
provincial legislation, namely, the National Gambling Act 7 of 2004
(“the
National Act”) and the Western Cape Gambling and
Racing Act 4 of 1966 (“the WC Act”). In terms of section
45
of the National Act, the National Minister of Trade and Industry
(“the National Minister”) may, by regulation made in

accordance with section 87 of the National Act, prescribe the number
of casino operator licences that may be granted in the Republic
and
in each province.   In terms of section 30 of the National
Act, each provincial licensing has exclusive jurisdiction
within its
province, to the extent provided in the Provincial Legislation, to:
(a) investigate and
consider applications for, and issue provincial licences in respect
casinos, racing, gambling, wagering, other
than for an activity or
purpose for which a national licence is required in terms of the
National Act;
(b)
conduct inspections to ensure compliance with the regulatory
framework.
[2]
Section 2 of the WC Act establishes a Board, whose main object is to
control all gambling,
racing and activities incidental thereto in the
Province and any policy determinations of the Executive Council
relating to the
size, nature and implementation of the industry.
Its powers include:
2.1
inviting application for licences in terms of the WC Act (subject to
certain exceptions)
and accepting such applications without such
invitations;
2.2
Considering and disposing of applications for licences in such manner
and such time and
place as it may from time to time determine.
2.3
Granting renewing, amending, suspending or revoking licences under
the WC Act.
2.4
Imposing, amending, suspending or revoking
conditions in respect of any time.
[3]
In terms of the WC Act, the Executive Council makes policy
determinations which guide
the exercise of the powers by the Board
and the Provincial Minister makes regulations about how the Board
shall exercise its powers.
The Provincial Minister has the power to
make regulations in respect of:
(a)
the maximum permissible number of licences of any particular kind
that may from time to
time be granted in a particular area; and
(b)
the granting of exclusive rights to the holder of a casino operator’s
licence for
any period and in respect of any area. The Board on the
other hand exercises its powers in the light of the Act, the policy
determinations
made by the Executive Council, and the Minister’
regulations.
[4]
On 29 August 1997 the Executive Council of the Western Cape issued
“
Western Cape Gambling and Racing Policy Determinations (
the
Policy
)”
which provide as follows:
“
With
the introduction of the of the gambling industry to the Province, the
Board shall take cognisance of the objectives contained
in the
National Gambling  Act, 1996 (Act 33 of 1996), and preamble to
the [Act], i.e. to minimise the possible negative impact
of gambling,
to prevent overstimulation of the latent demand for gambling and to
optimise the objectives of economic development,
job creation and
revenue regeneration. To this end –
(a)
Applications for casino operator licences, and where practicable, all
other operator licences,
shall be dealt with on a competitive
proposal/call basis. (Casino operator licences shall be considered
first, after which applications
for limited gambling machine (LGM)
operator shall be called for);
(b)
the five casino operator licences allocated to Western Cape shall be
distributed, one each
to five regions, in order to stimulate and
encourage development throughout the Province, inter alia, by the
empowerment of local
disadvantaged groups through both employment and
equity ownership;
(c)
a casino operator licence allocated to each of the regions shall be
exclusive for
a period of ten years, based on the required
exclusivity fees determined by the Law:
(d)
notwithstanding the provisions of paragraph (b), the exclusivity zone
for the Cape Metropolitan
casino, in relation to the other casinos,
shall have a 75-kilometre radius, calculated from the City Hall of
Cape Town.”
[5]
As can be discerned from the aforegoing, the policy which was
promulgated by the Executive
Council:
5.1
prescribes one casino operator licence for each of the five regions
of the Western Cape;
5.2
prescribes an exclusivity period of ten years in respect thereof.
[6]
Section 81 of the WC Act empowers the Minister to make regulations
regarding various
matters, including (a) the maximum number of
licences of any particular kind that may from time to time be granted
in a particular
area; and (b) the granting of exclusive rights to the
holder of a casino operator licence for any period and in respect of
any
area. Section 41(2) read with section 12(3) of the WC Act
authorises the Board, on application to amend a casino operator’s

licence if there is a change in the place at which the holder wishes
to perform activities authorised by the licence.
[7]
The issues in this matter arose because the Applicants’ holding
company, Tsogo
Holdings wished, as a result of changed circumstances,
to submit an application of its subsidiaries to the Board for the
amendment
of its casino licence licences so as to permit the
performance of the licensed activities from premises in the Cape
Metropole.
They state that because of the significant expense of
involved in the preparation of such an application, Tsogo Holdings
first
enquired from the Board whether the policy determination of 29
August 1997 is not a constraint to the Board’s granting such
an
application. The Board in response to the enquiry explained that it
was not competent to consider an application for the relocation
of a
casino operator licences in the Western Cape. Furthermore, according
to the Board’s explanation, it is impermissible
to apply for an
amendment of a licence where the intention is to substitute one
premises for another.
[8]
Against the Board’s refusal to consider and determining Tsogo
Holding’s
application to relocate a casino to the Cape
Metropole, the relief sought by the applicants in this application is
premised on
the fact that the aforegoing Policy directives
impermissibly,
inter alia
, usurp powers that are vested in the
Minister in terms of section 81 of the WC Act.  It is couched in
the following terms:
“
[1]
To the extent necessary, granting the Applicants condonation for
having failed to institute
an application for the relief sought in
paragraph 2 hereunder in accordance with the timeframes stipulated in
section 7
of the
Promotion of Administrative Justice Act No.3 of
2000
, alternatively, within a reasonable time period of time, and
granting the Applicants leave to institute the present proceedings.
[2]
Ordering paragraphs 1.1 (b) to (d) of the Western Cape Gambling and
Racing Policy
Determinations issued by the Executive Council of the
Western Cape on 29 August 1997 (as amended) [“the Policy”]
to
be ultra vires and to be of no force and effect.
[3]
Declaring that the Third Respondent is competent to consider and
determine an application
under section 41 (2) of the Western Cape
Gambling and Racing Act 4 of 1966 (“the Western Cape Act”)
for a casino operator
licence to be amended so as to permit the
holder to perform its licensed activities from the Cape Metropolis.
[4]
Directing the Third Respondent to consider and decide any application
by the First,
Second or Third Applicant under section 41 (2) of the
WC Act.
[5]
Declaring that a casino operator licence is not a premises licence as
envisaged in
terms of section 41 of the WC Act.
[6]
Directing that the costs of this application be paid by those
Respondents which oppose
the relief sought herein, and in the event
that there is opposition by more than one Respondents, such
Respondents shall be liable
for costs on a joint and several basis.”
The parties
[9]
The First Applicant, Garden Route Casino Pty) Ltd, is a limited
liability private
company with registration number 1998/000391/707
duly incorporated in the Republic of South Africa and with its
registered business
address at Palazzo Towers East, Montecassino
Boulevard, Fourways, Gauteng. The First Applicant is the holder of a
casino operator
licence known as “Garden Route Casino” at
Pinnacle Point Road, Mossel Bay. The Second Applicant is Tsogo Sun
Caledon
(Pty) Ltd also with registration 1996/010/ 0708/07, duly
incorporated in the Republic of South Africa with its registered
business
address at Palazzo Towers Montecassino Boulevard, Fourways,
Gauteng. The Second Applicant is the holder of a casino operating
licence
issued by the Board, in terms of which it operates the casino
known as “Caledon Casino, Hotel and Spa”. Likewise, the

Third Applicant, West Coast Leisure (Pty) Ltd, is a private company
with limited liability with registration number 1994/005194/07
duly
incorporated in the Republic of South Africa with its registered
business address at Pallazzo, Montecassino Boulevard, Fourways,

Gauteng. The Third Applicant is the holder of a casino operator
licence issued by the Board, in terms of terms of which it operates

the casino known as “Mykonos Casino” in Langebaan.
[10]
The First Respondent is the Premier of the Western Cape (“the
Premier”) in whom the
authority in the executive authority in
the Western Cape vests, His physical address being at No.7 Wale
Street, Cape Town. The
Premier also exercises the executive authority
together with provincial Ministers by, inter alia, developing and
implementing provincial
policy.  The Second Respondent is the
Provincial Western Cape Minister of Finance (“the Provincial
Minister”)
is cited in his official capacity as the Executive
Member of the Provincial government of the Western Cape responsible
for casino,
racing, gambling, and wagering (excluding lotteries and
sports pools). The Western Cape Gambling and Racing Board is the
Third
Respondent and is a juristic body established in terms of
section 2 of the WC Act which provides that the right to carry on any

gambling or racing activities incidental thereto in any manner,
whether directly or indirectly, within the Province vests exclusively

with the Board. The Board’s main object is to control all
gambling or racing or activities incidental thereto in the Province

subject to the WC Act and any policy determinations of the Executive
Council relating to the size, nature, and implementation of
the
industry. The Board’ principal place of business is at Seafare
House, 68 Orange Street, Cape Town. The Chairperson of
the Western
Cape Gambling and Racing Board is the Fourth Respondent and is cited
in her official capacity. The Fourth Respondent’s
principal
place of business is similar to that of the Third Respondent.
[11]
The Fifth Respondent is SunWest International (Pty) Ltd, a company
duly incorporated in terms
of the company laws of South Africa, with
registration number 19914/003869/07 and with its registered address
at 6 Sandown Valley
Crescent, Sandown, Sandton, Gauteng, 2146. The
Fifth Respondent is the holder of a casino operator licence issued by
the Board
in terms of which it operates the casino known as “The
GrandWest Casino”. The Fifth Respondent is the sole casino
operator
licence holder for the Cape Metropole. No relief is sought
against the Fifth Respondent and is cited in these proceedings on the

basis that some of the relief sought may have a bearing on it. The
Worcester Casino (Pty) Ltd is the Sixth Respondent and is a
company
duly incorporated in terms of the laws of the company laws of South
Africa with registration number 1998/01622/07 and with
its registered
address similar to that of the Fifth Respondent. The Sixth Respondent
is the holder of a casino licence operator
licence issued by the
Board in terms of which it operates the casino known as “Golden
Valley Casino”.  Likewise,
no relief is sought against the
Sixth Respondent and it is cited on the basis that certain aspects of
the relief sought may impact
on it.
[12]
For ease of reference the applicants are referred to as Tsogo Sun,
the first and second respondents
as the Provincial Government and the
third to fifth applicants as Sun International.
Factual Background
[13]
The factual background underpinning this application is outlined in
the founding affidavit deposed
to Mr Hendrik De Lange, Tsogo Sun
Group’s National Gaming Compliance Manager. Mr De Lange gives
the following factual background:
The Western Cape is divided into
five regions for the purposes of casino licence operators. These are
(a) the Cape Metropole; (b)
Southern Cape, Klein and Central Karoo
district (“Southern Cape”); Breede River District; (d)
Overberg District and
(e) West Coast District. One licence has been
awarded in respect of each region. As earlier alluded to, the First,
Second and Third
Applicants operate three of the five casinos in the
Western Cape.  The Fifth Respondent operates the Grandwest
Casino in the
Cape Town area, whereas the Sixth Respondent operate a
casino in Worcester. I refer to the affidavit deposed to by Mr De
Lange
on behalf of Tsogo Sun simply as Tsogo Sun’s affidavit.
[14]
According to Tsogo Sun, the initial exclusivity periods imposed by
the Board have expired and
the casino operator licence holders have
continued to operate an exclusive basis, to the exclusion of any
other casino operating
within the five regions. The table appearing
hereunder depicts information relevant to each of the casino operator
licence holders:
Casino
Operator
Licence Holder
Date of award of
Casino
Operator Licence
Commencement
Date
Exclusivity
Expiry Date
GrandWest
SunWest
International
(Pty) Ltd [Fifth
Res ondent
6 December
1999
15 December
2000
5 December
2010
Caledon
Tsogo Sun
Caledon
(Pty) Ltd
[Second
A licant
14 April 2000
11 October 2000
10 October
2010
Mykonos
West Coast
Leisure (Pty)
Ltd [Third
A licant
4 September
2000
1 4 November
2000
13 November
2010
Garden Route
Garden
Route Casino
(Pty) Ltd [First
A licant
11 July 2002
1 2 December
2002
11 December 2012
Worcester
Worcester
Casino (Pty)
Ltd [Sixth
Res ondent
10 May 2005
22 November
2006
9 May 2014
[15]
The Applicants allege that since about 2009, the Executive Council
and the Minister have been
considering changing the policy of
exclusivity, so as to permit a second casino in the Cape Metropole.
The Applicants attached
to the founding affidavit copies of newspaper
articles which refer to the Provincial Government ‘s intended
changes. More
specifically, it was, according to the Applicants
reported that the Provincial Government intended to announce a change
of policy
which will permit an existing Western Cape casino operator
licence to relocate to an area in the Cape Metropole, which the
Provincial
Government believes is untapped by GrandWest and would not
significantly affect GrandWest’s revenue. The Applicants state

that in order to reflect the intended policy changes, there were
various proposals by the Provincial Government for amendment of
the
legislative framework during 2012 and 2013. Draft Bills were
published, but were ultimately not enacted.
[16]
The Applicants state that they made submissions to the Provincial
Government in response to the
publications of the draft legislation
wherein they supported the proposal that the law be amended to make
it possible for two casinos
to operate in the Cape Metropole. Tsogo
Sun further states that they held back from exercising their rights
to apply to the Board
for the relocation of one of its outlying
casino section 41 (2) WC Act in favour of yielding to what appeared
then to be imminent
legislative changes which would facilitate the
awarding of two casino operator licences without the need for
litigation. In addition,
after taking advice, they decided to await
the enactment of the anticipated legislation. However, so avers Tsogo
Sun, significant
time has passed without the intended legislation
coming to fruition, and there being no indication that such
legislation will be
promulgated in the near future, the indications
are that it may well be further delayed because of impending
litigation instituted
by the Fifth and Sixth Respondents as well as
their holding company, Sun International. According to the Applicants
the primary
relief sought by Sun International in that application is
the reviewing and setting aside the decision supposedly taken by the
Provincial Government of the Western Cape on 9 June 2010 (on the
recommendation of the Board) to abolish future casino exclusivity
in
the Cape Metropole, and to allow one of the outlying casinos to
relocate to the Cape Metropole. In short, Sun International
sought
that the existing Policy should remain in force. Tsogo Sun states
that the Executive Council has however, not published
a new policy
determination in terms of sections 2 (4) and 2 (6) of the WC Act.
According to the Applicants, it appears that no
final decision has
been taken in this regard.
[17]
In the present application, Tsogo Sun seeks a declaration of
invalidity of the impugned provisions
of the Policy. This is premised
on the fact that section 41(2) of the Western Cape Act provides that
if there is a change in the
place at which the holder of a licence
wishes to perform the activities authorised by the casino operator’s
licence which
would require the amendment of the licence, the holder
may apply to the Chief Executive Officer of the Board for the
amendment
of the licence.
[18]
On 11 November 2015, Tsogo Holdings wrote to the CEO of the Board
advising it that one of its
subsidiaries, wished to submit an
application for the amendment of its casino operator’s licence
so as to permit the performance
of the licenced activities from the
premises in the Cape Metropole. Tsogo Sun avers that the purpose of
the letter was to enquire
whether the Board’s view was that the
Policy is a constraint to granting such an application before
incurring significant
expenses in the preparing and submission of
such an explanation. Because Tsogo Sun’s case is founded mainly
on the views
of the Board as expressed in response in its letter
dated 30 November 2015, I find it necessary to refer substantially to
its contents.
It reads thus:
“
3.
It is trite that an administrative functionary has no inherent powers
and can only
do what the legislation expressly or impliedly authorise
them to do. Where an administrative functionary seeks to do that
which
is not authorised by law, its conduct is ultra vires and
reviewable I a court of law.
4.
The Draft Seventeenth and Eighteenth Amendment Bills, and Draft
Amendments to
the Regulations published in Provincial Gazette of 16
March 2012 evidences:
4.1
The legislature’s intent to provide for the relocation of one
of te outer-lying casinos
to the Metropole;
4.2
That such casino will pay a premium exclusitivity fee for relocation
within 75km of the
Cape Town City Hall; and
4.3
That exclusivity fees are paid annually.
5.
Having studied all legal prescripts conferring powers on the Board to
consider
and issue casino operator licences, including the casino
premises/complex, I opine that the Board is not competent o consider
an
application for the relocation of a casino operator licence in the
Western Cape.
6.
. . .
7.
It is pertinently clear from the Executive Council Policy
Determinations, published
on 29 March 1999, that the Board was
enjoined inter alia to give effect to:
7.1
That the Board shall issue five casino operator licences, one in each
of the five regions.
These regions were clearly marked on a map
annexed to te Policy Determinations/and or the respective Request for
Proposals issued
when applications for casino operator licences were
called for in the Western Cape; and
7.2
The financial commitments, exclusivity perid as well as the ambit of
the exclusivity zones
of both the Metropole casino and the four
outer-lying casinos were clearly circumscribed in the said Policy
Determinations.
8.
Considering an application for relocation of one your casinos to the
Metropole,
would in my view, go against the expressed intention of
the Provincial legislature as evidenced in the Draft legislative
amendments
referred ti in paragraph seven supra.
9.
It would also breach the policy determinations, (that one casino
licence be issued
in each of the five regions dermacated fr the
Western Cape) and would be ultra vires the powers of the Board for
the reasons stated
above.
10.
I note that your letter under reply specifically enquires whether the
writer may consider
an application for relocation of one your casino
operator licences to the metropole in accordance with the powers
conferred by
Section 41(3) of the Western Cape Gambling and Racing
Act. The provision provides for the Chief Executive Officer to amend
a licence
in specified circumstances. The immediate subsection 3 of
the said provision however expressly provides that where a licence
holder
wishes to perform gambling activities at premises other than
that specified in its licence such licence holder shall apply to the

Board for the relevant premises licence.
11.
It is therefore clear that one may not apply for the amendment of a
licence where the intention
is to substitute one premises for
another. In this instance, you would be required to apply for the
relevant premises licence,
which application must be considered by
the Board.
12.
. . .
13.
In the premises, I advise that neither the Board, nor its Chief
Executive Officer is competent
to consider the relocation of a casino
to another region, and/or the metropole.”
[19]
According to Tsogo Sun, it is clear from the Board’s reply that
it considers itself bound
by the Policy, and that irrespective of the
merits of the application submitted to it in terms of section 41(2)
of the WC Act,
it will refuse such application if the effect thereof
will be in breach of the exclusivity requirement in the Policy.
Tsogo
Sun avers that this application has become necessary because of
the Board’s view to the effect that the impugned provisions
of
the Policy circumscribe and fetter the discretion that section 41 (2)
confers on it. It also disputes the Board’ stance
in paragraph
10 of its letter, to the effect that the applicants are the holders
of “a premises licence” in terms of
the Act. Thus, it, to
this end seeks a declaratory order that the applicants are holders of
a casino operator’s licence.
[20]
I now turn to outline the various ground upon which the applicants
assail the provisions of the
Policy.
[21]
Tsogo Sun contends that the impugned provisions of the Policy are
ultra vires and invalid for
the following reasons:
21.1
First, the Policy as adopted pursuant to section 2(4) and 2 (6) of
the WC Act. In terms of section 2(6),
the Executive Council is
empowered to make policy determinations relating to the “size,
nature, and implementation”
of the industry. According to Tsogo
Sun, the Executive Council is however, not authorised to prescribe a
requirement for exclusivity
in each of the regions of the Western
Cape, the effect of which is that no more than one operator licence
may be held for each
region.
21.2
Second, a policy determination made by the Executive Council cannot
override, amend or be in conflict with
the WC Act. The WC Act confers
on the Board the power and discretion to grant applications, and
determine conditions of licences
in section 37 and 41(2). The
applicants state that such power and discretion cannot be removed by
a policy determination such as
that which has been made.
21.3
Third, section 81 of the WC Act empowers the Provincial Minister to
make Regulations in respect of, inter
alia:
(a)
the maximum permissible number of licence of any particular kind that
may from time to time
be granted in a particular area;
(b)
the granting of exclusive rights to a holder of a casino licence
operator for any period
and in respect of any area.
Tsogo Sun further avers
that the Executive Council has purported, by making a policy
determination under section 2(4), to exercise
the Provincial
Minister’s power under section 81. Furthermore, although the
Provincial Minister is part of the Executive
Council, there is a
marked difference between a policy and subordinate legislation such
as a Regulation. Moreover, there is a difference
between a power
which is to be exercised by Cabinet as a whole, and a power which is
to be exercised by a member of the Cabinet.
According to this
contention, if legislation empowers the Minister to make a decision
by regulation, the power may only be exercised
by the Minister
through a regulation. The applicants further aver that this issue has
been addressed by the Supreme Court of Appeal
in its judgment in
Akani
Garden Route (PTY) LTD v Pinnacle Point Casino (PTY)
LTD
2001 (4) SA 501
SCA as follows:
“
Where
for instance, the provincial Act entrusts the Minister with the
responsibility of determining the maximum permissible number
of
licences of any particular kind that may be granted in a particular
area (s 81 (1) (d)), the Cabinet cannot regulate the matter
by means
of a policy determination, something it did. Likewise, where 37 (1)
(l) empowers the Board to impose conditions relating
to the duration
of the licence, the Cabinet cannot prescribe to the Board by way of a
policy determination that, for instance,
casino licence holders shall
be for a period of ten years, something else it did. In other words,
the cabinet cannot take away
with one hand that which the lawgiver
has given with another.”
[1]
21.4
Fourth, Tsogo Suns contends that Policy draws an irrational
distinction in respect of the exclusivity zone
for the Cape Metropole
casino [in paragraph 1.1(d) ad “other casinos” in
paragraph 1.1 (e) which provides that “exclusivity
zone for the
other casinos should be determined by the Board”.
[22]
For all the aforegoing reasons, the applicants seek the relief
outlined in the notice of motion.
[23]
Tsogo Sun avers that it is entitled to the declaratory relief sought
in the notice of motion as the
Board has unequivocally stated that it
is precluded from considering the application one of the applicants
intended to submit,
despite the judgment of the Supreme Court of
Appeal
in Akani
.
In summary the primary relief the applicants seek is a declaratory
order that paragraphs 1,1 (b) to (d) of the Policy are ultra
vires,
invalid and of no force and effect in the following manner:
23.1
Paragraph 1,1(b) of the Policy stipulating that there shall only be
one casino in each region is ultra vires
and invalid as this the
beyond the powers of the Executive Council;
23.2
Paragraph 1.1 (c) stating that a casino operator’s licence
shall be exclusive for a period of ten years
is similarly invalid and
of no force and effect because the declaration is beyond the powers
of the Executive Council;
23.3
Paragraph 1.1 (c) stating that a casino licence shall be exclusive
for a period of ten years is likewise,
ultra vires as the declaration
goes beyond the powers of the Executive Council.
23.4
Paragraph 1.1 (d) of the Policy prescribing the exclusivity zone for
the Cape Metropole is unlawful to the
extent that it is inconsistent
with section 44A of the WC Act.
[24]
As earlier pointed out, Tsogo Sun also seeks a declaratory order to
the effect that the applicants
are holders of a casino operator’s
licence and not the holders of a “premises licence” in
terms of the Act. According
to this contention, the Board’s
refusal to consider a section 41(2) is wrongly premised on the fact
that the applicants are
the holders of a “premises licence”.
[25]
The applicants emphasise that the impugned provisions violate the
fundamental constitutional principle
of legality in that they are
both ultra vires and irrational. They further contend that the
Promotion of Justice Act 3 of 2000
(“PAJA”) is not
applicable to this matter, and even if it did, that does not affect
the Applicant’s challenge
to the validity of the impugned
provisions, as those provisions are inconsistent with both the
principle of legality and the requirements
of PAJA in that:
25.1
They were not authorised by the empowering provision of the WC Act;
25.2
They were made as a result of misapprehension by the decision-maker
of its powers under the WC Act;
25.3
They are not rationally connected to: (a) the purpose for which they
were made; and (b) the purpose of the
empowering provision; and
25.4
They are otherwise unconstitutional or unlawful, in that the
Executive Council usurped the functions which
the legislature has
conferred on the Provincial Minister and the Board.
[26]
Tsogo Sun further states that the making of the Policy was not an
administrative act, under either
the common law or PAJA for the
following reasons:
26.1    It
was a decision of a legislative nature: the Policy Determination is a
form of legislation, similar to
a regulation; or alternatively,
26.2    It
was the exercise of the executive powers and
functions of the
Provincial Executive.
[27]
Accordingly, so surmise Tsogo Sun, neither PAJA nor the common law of
administrative law finds
application. It further evers that the
application was brought within a reasonable time as there is no time
limit within which
an affected party may challenge the lawfulness of
a Policy Determination purportedly made in terms of section 2(4) of
the WC Act.
In any event, so contends Tsogo Sun, the circumstances in
this matter and the interests of justice require that the application

not be time barred and that the merits of the application be
determined for the following reasons:
27.1
The relief sought in this application is forward-looking as the
applicants do not seek to reverse anything
which has been done under
the Policy Determination. They seek only relief which will prevent
future breaches of the law, and which
will enable them to exercise
their statutory rights. Besides, so goes the contention, the licence
holders have had the benefit
of the ten years and more of the
exclusivity which was provided by the Policy when they applied for
casino operator licences and
cannot validly cannot contend that they
made their investment in their casinos on the assumption that
exclusivity would continue
in perpetuity.
27.2
Second, the applicants had no interest in challenging the Policy
until they sought to exercise their rights
under section 41(2) of the
WC Act, and the Board raised the existence of the Policy as an
insurmountable barrier to the exercise
of its powers under section
41(2);
27.3
Third, unless the relief sought in this application is granted, the
applicants’ intended application
in terms of section 41 (2)
will determined on a basis which is inconsistent with the Act;
27.4
Fourth, according to the applicant, there have been a number of
indications by the provincial government
that the legislation would
be amended in a manner which would make this application unnecessary.
27.5
Fifth, it cannot be in the interests of justice that a casino
operator can have exclusivity for its operations
indefinitely, and
potentially into perpetuity, when that exclusivity is conferred by a
decision which is in breach of the governing
statute.
27.6
Sixth, it is unconsciable and intolerable for a public authority
simply to ignore a judgment of the Supreme
Court of Appeal, and then
assert that t does not have to comply with the law. Courts will not
countenance that attitude.
27.7
Seventh, according to the applicants, the Board is estopped from
denying that the impugned provisions are
invalid. This, according to
the contention is so because where the actor in question is an organ
of state which exercises regulatory
functions, it will not be
permitted to enforce a provision in the regulatory regime, which, in
litigation brought by another party
which is subject to that regime,
has been found to be invalid. To this end, common law should be
developed to address this situation.
27.8
Eighth, Tsogo Sun contends that if the Board had attempted to enforce
the impugned provisions on Akani, Akani
would succeed in an argument
that this was impermissible, on the grounds that the provisions are
invalid, and this issue was already
determined in earlier litigation.
It therefore was not in the interests of justice for some of these
provisions to be enforced
against another party, and for that party
to be prevented from challenging them. Put differently, the
regulatory regime cannot
differ, depending on who is being regulated.
27.9
Ninth, the provisions are legislative and quasi-legislative. They
cannot be valid for some persons, and invalid
for others.
[28]
The upshot of all the aforegoing contentions is that Tsogo Sun asks
for an order extending the
period provided in section 7(1) of PAJA to
the date when this application was launched, should tis court find
that PAJA is applicable.
More specifically, Tsogo Sun seeks
condonation for the late filing of this application.
The First and Second
Respondent’s answering affidavit
[29]
As earlier alluded to, the First and Second Respondents oppose this
application. In an affidavit
deposed to by Mr Harry Clifton Malila, a
Deputy Director-General in the Western Cape Provincial Government,
and the Branch Head:
Fiscal & Economic Services in the Western
Cape Provincial Treasury ('the Provincial Treasury’), the main
basis for opposition
is that this application prejudges several
issues under consideration in the process of drafting new legislation
dealing with the
regulation of gambling in general and the licensing
of casinos in the Western Cape.
[30]
The defences raised by the Provincial Government are best understood
in the context of their factual
and legal background as set out in
its answering affidavit. The Provincial Government states that prior
to 1994, gambling within
the borders of the Republic of South Africa
was largely prohibited by the Gambling Act 51 of 1965, while casinos
were permitted
– and highly regulated – in the former
‘independent homelands’ of Transkei, Bophuthatswana,
Venda and Ciskei.
After 1994, both the Interim Constitution and the
Final Constitution specified gambling as a concurrent national and
provincial
competency, which in turn led to a new approach to
gambling in the new dispensation, namely its being permitted
throughout the
Republic subject to strict regulation. This required
putting in place both a national and provincial policy and regulatory
frameworks.
The Provincial Government explains that the Western Cape
Provincial government commissioned wide-ranging research to assist
with
the drafting of its gambling policy and regulatory framework. On
13 September 1995, the Provincial Cabinet (then called the Executive

Council) approved a gambling policy framework which, among other
things, provided for the incremental development of the industry’s

market potential in order to minimize possible negative effects.
Furthermore, the Provincial Cabinet approved an approach to
developing
the gambling industry that would aim to realize the
following benefits:
30.1
promoting economic development with
concomitant employment and training opportunities;
30.2
facilitating the development of secondary
industries in close association    with gambling
ventures;
30.3
ensuring greater participation of the
disadvantaged in the economy;
30.4
promoting and supporting tourism;
30.5
promoting the provision of community
facilities; and
30.6
generating tax for the Province so as to
improve its revenue position.
[31]
The Provincial Cabinet’s approach included introducing
appropriate legislation in the provincial
legislature, and to this
end, enacted on 22 May 1996 the provincial the WC Act. Section 2 of
the WC is entitled ‘
Establishment of Western Cape Gambling
and Racing
Board’
and does the following:
31.1
section 2(1) establishes the Western Cape Gambling and Racing Board;
31.2
section 2(2) vests in the Board the exclusive right to ‘
carry
on any
gambling or racing or activities incidental thereto’
subject to sub-section (4); and
31.3
section 2(4) determines the main object of the Board to be to
‘control all gambling, racing and activities
incidental thereto
in the Province subject to this Act and any policy determinations of
the Executive Council relating to the size,
nature and implementation
of the industry.
[32]
Section 45 of the WC Act deals with casino operator licenses
generally. It includes the following:
32.1
section 45(2) provides a casino operator license is required by every
company which permits or conducts gambling
in or on any premises in
the Province which are not limited gambling machine premises or
premises operated under a bingo license;
and
32.2
section 45(4) provides that a casino license shall attach to the
premises specified in the license, and which shall be developed
in
accordance with the approved development application.
[33]
The Provincial Government explains that the adoption of the Policy on
30 July 1997 obliged the
Board to take cognizance of the objectives
contained in the 1996 national Act and the WC Act, more specifically
‘
to minimize the possible negative impact of gambling, to
prevent overstimulation of the latent
demand for gambling and
to optimize the objectives of economic development, job creation and
revenue generation.’
To this end, clause 1.1 sets out
specific determinations which bind the Board, and they are the
following:
(a)
the five casino operator licenses allocated to Western Cape shall be
distributed, one each
to give regions, in order to stimulate and
encourage development throughout the Province, inter alia by the
empowerment of local
disadvantaged groups through both employment and
equity ownership;
(b)
a casino operator license allocated to each of the five regions shall
be exclusive for a
period 10 years, based on the required exclusivity
fees determined by the Law;
(c)
notwithstanding the provisions of paragraph (b), the exclusivity zone
for the Cape
Metropolitan Casino, in relation to the other casinos,
shall have a 75-kilometre radius, calculated from the City Hall of
Cape
town;’
The Provincial Government
reiterates that the WC Act does not make provision for the extension
or renewal of the exclusivity determination.
That said, all the
casino operator’s licences, have expired as depicted in the
applicant’s table.
[34]
According to the First and Second Respondents, the lapsing of the
exclusivity regime, required
the Provincial Treasury to devise a new
fee dispensation to take its place. In addition, freed of the casino
license holders’
rights to exclusivity, the Provincial Treasury
had to consider whether the regulatory framework as a whole should be
revised in
order to permit more than one casino to be located in the
well-resourced Cape Metropole. If that were permitted, one or more of

the outlying casinos would have to cease operations, given that the
number of licenses allocated by the national government to
the
Province is fixed at five. This, according to the Provincial
Government, is so because for every additional casino that is

permitted in the Cape Metropole, one of the outlying casinos must
close. Furthermore, this has given rise to a complex matrix of

impacts, amongst other things because casino operations generate
significant formal employment and potential for economic opportunity

along the supply chain in the areas where they operate
,
the
overall aim of regulating gambling being to leverage the industry’s
potential financial and economic benefits to society
while ensuring
that demand is not over-stimulated in any particular area, and that
negative impacts of gambling are effectively
mitigated. They also
generate substantial revenue, in the form of taxation and license
fees, for the Province. Gambling tax is
currently one of the
significant provincial taxes – the remainder of the Province’s
own revenue derives primarily from
motor vehicle license fees, health
patient fees and interest on investments.
Moreover,
Casino
taxes contribute by far the greatest share of the Western Cape
gambling industry’s more than half a billion Rand annual

contribution to the provincial fiscus (in the 2017/18 financial year,
casino taxes contributed R 433 117 795 to the provincial
coffers).
Casinos are, however, sensitive to overall economic conditions, and
face increasing competition from limited pay-out
machines, sports
betting and online gambling. In addition, the turnover of the five
licensed casinos in the Province differ significantly.
The GrandWest
casino in Cape Metropole remains, by some margin, the largest casino
operation in the Western Cape, consistently
contributing more than 80
per cent of the Western Cape’s casino tax revenue
[35]
The Provincial Government avers that in August 2009, with a view to
the advent of the post-exclusivity
era, the Provincial Treasury
commissioned the Bureau for Economic Research (‘BER’) in
the Faculty of Economics and
Management Sciences at Stellenbosch
University to put together a team of economists, legal practitioners
from the private sector
and financial specialists to advise the
Provincial Treasury on the complex socio-economic issues concerning
gambling in the Western
Cape, as well as in respect of data analysis
and fiscal modelling. This was to allow the Provincial Treasury to
properly investigate
and, if necessary, to formulate a new regulatory
framework. The BER’s research had to deal with at least the
following:
35.1
the then current and projected micro-and macroeconomic changes in the
provincial economy, as well as in each
of the areas where the then
current casino operations were located, and how these would be
affected if there were a relocation
of one or more of the outlying
casinos to the Cape Metropole;
35.2
the then current and projected direct and indirect economic impacts
on the local economics in the areas where
the current casinos
operated, any areas to which re-location was proposed, and potential
alterative areas for re-location;
35.3
the need to ensure that gambling in the Province is not
over-stimulated in any one area, including a consideration
of the
potential for increased access of financially vulnerable households
to gambling opportunities which might lead to an increase
in problem
gambling – in other words, the social impact of any proposed
relocation(s);
35.4
independent verification of the data provided by the casino
operators;
35.5
the need to devise a new fee regime in the aftermath of the
exclusivity fee regime, in line with the principle
that the industry
should pay for its regulation and ensure the Board’s financial
self-sufficiency;
35.6
the need to ensure that any relocation process is undertaken in a
constitutionally compliant manner, i.e.
based on a transparent,
competitive and transformative process; and
35.7
the need to devise a suitable taxation structure in order to be
responsive to any redistribution of gross
gambling revenue across the
Province that the possible relocation of one or more of the outlying
casinos into the Cape Metropole
any trigger.
[36]
According to the Provincial Government the relocation of an outlying
casino has a huge impact
on the taxation. The licensed casinos in the
Province have been taxed using a progressive tax scale, based on
Gross Gambling Revenue
(‘GGR’). This approach caters for
the one large casino in the well-resourced Cape Metropole. Given the
much higher
taxable GGR generate by GrandWest relative to the other
four licensed casinos in the Province, it is taxed at a progressively
higher
rate than the others (whose revenues do not reach the higher
tax brackets). The effect of that is If the relocation of one or more

of the outlying casinos to the Cape Metropole has the effect of
reducing GrandWest’s GGR, without a concomitant increase
in the
GGR to other operators, it will flatten the gambling tax base and
decrease the Province’s own revenue unless the tax
brackets are
adjusted. For that reason, the current basis on which gambling taxes
are formulated may have to be overhauled if competition
for GrandWest
in the Cape Metropole is permitted. Any investigation of a new tax
structure must accordingly not only take account
of the projected GGR
loss at GrandWest due to increased competition, as well as the
financial impacts on the remaining outlying
casinos.
[37]
The Provincial Government states that any revision of the tax
structure would have to simultaneously
achieve the following:
37.1
the proposed relocation(s) must not result in a net loss of tax
revenue to the Province;
37.2
the revised tax structure must be devised so as to be neutral as
regards the location of the casino operations
in the Cape Metropole,
i.e. the casinos in the Cape Metropole should base business decisions
purely on commercial considerations
and free from any considerations
of differing tax consequences based on their location; and
37.3
although it is unavoidable that the move towards a less progressive
tax structure will have some impact on
the tax burden on the
remaining outlying casinos, it must be ensured that this is not
significantly averse to them.
[38]
The Provincial Government further states that another complex issue
relating to the relocation
of an outlying casino relates to whether
to replace the previous exclusivity fee with a new economic
opportunity fee based on the
value of the access granted to the
casino(s) permitted to relocate to the Cape Metropole. This is
particularly so because devising
a formula for a possible economic
opportunity fee requires a reliable projection of the anticipated
additional GGR for the relocating
casino(s) in a variety of
circumstances.
Events leading up
to the litigation by the parties in this application
[39]
The aforegoing factual background is, according to the Provincial
Government relevant to understanding
the impugned current litigation.
It says that in June 2010, following a confidential information
gathering exercise with each of
the five casino operators in the
Province, the BER provided the Provincial report’), which
concluded with six recommendations:
39.1
there was insufficient justification Treasury with its report (‘the
2010 BER
in terms of economic
efficiency, social welfare considerations, or optimization of
revenue, to maintain the anti-competitive status
quo of one casino
operating in the Cape Metropole;
39.2
the BER recommended that one additional casino be permitted to
operate in the Cape Metropole;
39.3.   it
recommended comprehensive amendments to legal; framework.
39.4    it
recommended an across-the-board increase in the gambling tax by two
percentage points to optimize revenue
potential, as an interim
measure;
39.5 it recommended that
the exclusivity regime (including the payment of exclusivity fees) be
abolished and replaced by an increase
in the tax rate;
39.6.   it
recommended that a fraction of the additional tax revenue be
earmarked for direct funding of the Board; and
39.7.   it
recommended a transparent, competitive bidding process for the new
casino in the Cape Metropole.
[40]
It is undisputed that on 9 June 2010 the Provincial Cabinet approved
these recommendations, but
determined that the
status quo
would continue pending the introduction of the comprehensive amended
regulatory framework to give effect to the selection options
and
other proposals. This led to the publication for comment of Draft
Seventeen and Eighteenth Amendment Bills and draft Regulations
on the
WC Act on 16 March 2012 as a consequence of which the Western Cape
Seventeenth Gambling and Racing Amendment Act, 2013 and
the Western
Cape Eighteenth Gambling and Racing Amendment Act, 2013 came into
effect on 1 September 2013
.
(‘the Seventeenth and
Eighteenth Amendment Acts’). The Provincial Government avers
that the approval of the recommendations
by the Provincial Cabinet on
9 June 2010, more particularly that one additional casino be
permitted to operate in the Cape Metropole
led to the institution of
proceedings in this Court under case number 18791/2015 by Sun
International on 30 September 2015 challenging
the Provincial
Cabinet’s decision to approve the recommendations by the
Provincial Treasury to permit a second casino to
be located in the
Cape Metropole. On 17 December 2015 Tsogo Sun instituted the current
proceedings, where in effect it seeks orders
directing the Board to
consider and determine an application by one of the outlying casino
operators to relocate to the Cape Metropole.
Events since the
litigation commenced
[41]
According to the Provincial Government, after the commencement of the
litigation by Sun International
/ Tsogo Sun, the Provincial Treasury
revived its request to the BER to provide an update on its 2010
report. The main focus was
whether there was any reason why its
recommendations made in 2010 should be withdrawn, amended or, if
necessary, be revised on
the basis of updated data and the
submissions made in the legislative process leading to the
Seventeenth and Eighteenth Amendment
Acts. Before Terms of Reference
could be finalised, however, early in 2016 Sun International and
Tsogo Sun approached the Provincial
Treasury with a joint proposal to
consider the addition of not one but two casinos to the Cape
Metropole, i.e. the relocation of
the Golden Valley casino in
Worcester (owned by Sun International) to a site in or near the
Waterfront in Cape Town, and the relocation
of the Caledon casino
(owned by Tsogo Sun) to a site in the Strand / Helderberg Area.
Consequently, during March 2016 the Provincial
Treasury requested the
BER to undertake not only an update of certain aspects of the 2010
BER report, but also research to enable
the Provincial Government to
assess the impact of the joint proposal received from Sun
International and Tsogo Sun. Tsogo Sun and
Sun International agreed
to suspend their respective litigation (i.e. the present matter and
the one instituted by Sun International
on 30 September 2015, as
earlier alluded to) whilst the joint proposal was considered. The
Provincial Government avers that the
drafting process resulted in the
following significant milestones:
41.1 On 10 February 2017
Legal Services circulated the first version of the Draft Nineteenth
Amendment Bill to the Provincial Treasury,
with requests for comment.
During the course of April and May 2017 the Provincial Treasury and
the Board provided their input.
41.2    On
13 October 2017 Legal Services circulated the third version of the
Draft Nineteenth Amendment Bill to
the Provincial Treasury, with
requests for further comment. On 21 November 2017 the Provincial
Treasury and the Board provided
their further input.
41.3
During the remainder of November 2017, Legal Services circulated a
further three versions (up to version
six) of the Draft Nineteenth
Amendment Bill to the Provincial Treasury, along with draft
Regulations as well as various draft memoranda.
[42]
The preceding background is the context through which the Provincial
Government’s defences
to the Applicants’ claims should be
considered.
The Provincial
Government’s answer to the challenges raised by the applicants
[43]
It will be recalled that, Tsogo Sun assails the impugned provisions
of the Policy on the basis
that they are unlawful,
ultra vires,
irrational and invalid. The first reason is that the Policy was
adopted pursuant to section 2(4) read with section 2 (6), the upshot

of which is that whereas the Executive Council is empowered to make
policy determinations relating to the “
size and nature of
the implementation”
of the industry, it is not authorised
to prescribe a requirement of exclusivity in each of the five regions
in the Western Cape.
The Provincial Government counters the attack by
stating that sections 2(4) and 2(5) of the WC Act together make the
Board’s
powers to regulate the gambling industry subject to
Cabinet’s policy determinations relating to ‘
size,
nature and implementation of the industry’
. According to it
what is meant by the “
implementation of the gambling
industry”
is more complex. The Provincial Cabinet’s
power provided for in 2(4), so avers the Provincial Government, is
accordingly
to determine the manner in which its plan for the
gambling industry is executed, as well as to determine the nature and
size of
the gambling industry. Moreover, Clause 1.1(b) provides that
the regional distribution of casinos in the Western Cape is ‘
in
order to stimulate and encourage development throughout the Province,
inter alia by the empowerment of local disadvantaged groups
through
both employment and equity ownership’.
The stated purpose
of clause 1.1 (b) is therefore that it should be a vehicle for
economic upliftment in underdeveloped areas of
the Province.
According to the Respondents, in this way, clause 1.1(b) directly
contributes to the realization of the developmental
aims which
Cabinet adopted on 13 September 1995 (referred. In addition, though
the regional distribution of casinos, as well as
the limitation of
the number of casinos in well-resourced areas such as the Cape
Metropole, clause 1.1(b) limits competition between
casino operators
and limits access to the lucrative Cape Metropole. In this way,
clause 1.1(b) also determines the size of the
industry, collectively
and in each of the regions, as well as the protected nature of the
industry. Clauses 1.1(c) and (d), on
the other hand, protected the
economic interests of casino license operators through a ten-year
exclusivity regime envisaged by
section 44A of the WC Act. During its
operation, the exclusivity regime effectively protected casino
operators from regulatory
changes that would amend the regional
distribution of casinos put in place by clause 1.1(b). in this way,
clauses 1.1(c) and (d)
similarly have a direct impact on the
implementation of the industry, as well as its nature.
[44]
Regarding Tsogo Sun’s averments to the effect that a policy
determination made by the Executive
Council cannot override, amend or
be in conflict with the WC Act which conferred on the Board the power
and discretion to grant
applications, and determine conditions of
licences, in sections 37 and 41(2) of the WC Act. The First and
Second Respondents respond
to this ground by stating that, first,
Tsogo Sun’s case is moot, given that all exclusivity
determinations expired several
years ago. Second, the regional
distribution of casinos in the Western Cape and the exclusivity
determinations applicable to them
are not matters in respect of which
the Board has the power to impose conditions. Third, the Board
considered the clauses in dispute
and supported their inclusion in
the Policy. Finally, in this regard, and in any event, the WC Act
expressly makes the exercise
of the Board’s discretion subject
to the terms of the Policy.
[45]
With regard to Tsogo Sun’s allegation that the Provincial
Cabinet usurped the power and
discretion accorded to the Board by
sections 37 and 41(2) of the WC Act to determine the conditions of
license, and has thus impermissibly
attempted to override, amend or
act in conflict with the WC Act, the First and Second Respondent
retort as follows:
45.1
Section 37 of the WC Act is entitled ‘
Conditions applicable
to licenses’
sets out in subsections 1(a) to (o) an open
list of conditions which the Board may impose. Two of these are
relevant:
45.1.1 Section 37(1)(f)
provides that the Board may impose conditions ‘
relating to
the premises in or on which gambling activities take place including
the development and utilization thereof;
and
45.1.2 Section 37(1)(l)
provides that the Board may impose conditions ‘
relating to
the duration of a license’.
Clauses 1.1(b) to (d) do not
purport to deal with the duration of casino operator licenses. The
casino operator licenses in issue
are granted for a period of twelve
months (determined by the Board), and renewed annually (by the
Board). Instead, clauses 1.1(c)
and (d) deal with the length of the
exclusivity determination.  That is not a matter reserved for
the Board by section 37(1)(l).
45.1.3 As regards the
interpretation of 37(1)(f), the First and Second Respondents aver
that in the face of the statutory requirement
in section 45(4) of the
WC Act that a casino operator license must specify the premises to
which the license attaches, section
37(f) cannot mean that it
reserves for the Board a discretion whether or not to determine the
location of the casino operation
as part of the conditions applicable
to the license. The regional distribution of casinos is accordingly
not a matter reserved
for the Board by section 37(1)(f), which
consequently applies only to other types of licenses.
[46]
As regards the third basis of Tsogo Sun’s allegation that the
provisions of the Policy
are unlawful or ultra vires in that section
81 of the WC Act empowers the Provincial Minister to make
Regulations, and the Executive
Council has, by making a policy
determination under section 2(4) purported to exercise the Provincial
Minister’s power under
section 81, the Provincial Government
responds by stating that Tsogo Sun’s complaint places form over
substance. According
to it, at the time the Policy was adopted, the
gambling portfolio fell under the then Premier, who introduced the
Policy to the
Provincial Cabinet and supported its adoption. The
procedural safeguards which the WC Act imposes on the making of
Regulations
were adhered to. There therefore has been substantial
compliance with the WC Act, according to the Provincial Government.
[47]
It will be recalled that, Tsogo Sun also alleges that when Cabinet
made the Policy, it purported
to exercise a power granted to the
Provincial Minister, the Second Respondent.  Section 81(1) gives
the ‘
responsible Member’
the power to make
Regulations in respect of:
(d)
the maximum permissible number of licenses of any particular kind
that may from time to time be granted in a particular area;
…
(f) the granting of
exclusive rights to the holder of a casino operator license for any
period and in respect of any area;
(g) any other matter that
may be relevant to the establishment of casinos in the Province;
The First and Second
Respondents aver that when the Policy was adopted, the Member of the
Executive Council responsible for the
administration of the WC Act
was the then Premier. The Policy was introduced by the Premier into
the Provincial Cabinet, and the
resolution for its adoption was
supported by the Premier (along with all the other members of the
Cabinet). However, the Provincial
Government accepts that section 81
of the WC Act imposes specific requirements on the making of
Regulations that do not ordinarily
attach to the making of policy
determinations. These are the following:
47.1
the making of certain Regulations, require consultation with the
Board; and;
47.2
Regulations with financial implications shall only be made with the
concurrence of the Minister responsible
for Finance and must also be
published publication in the
Provincial Gazette
is for them to
be valid. The First and Second Respondents further state that In the
case of the Policy, each of these requirements
has been substantially
complied in the sense that there has been compliance with the purpose
of each of them in that:
47.1.1 the Board was
consulted and provided extensive comment on the Policy;
47.1.2 the Policy was
adopted unanimously and accordingly supported by the Finance Minister
Mr Meiring; and
47.1.3 as required by
section 2(6) of the WC Act, the Policy was published in the
Provincial Gazette
, as appears from the extract attached to
the founding affidavit.
[48]
Insofar as Tsogo Sun’s reliance on the
Akani
judgment
pronouncement, to the effect that where the Provincial Act entrusts
the minister with the responsibility of determining
the maximum
permissible number of licences of any particular kind that may be
granted in a particular area, the cabinet cannot
regulate the matter
by means of a policy determination, the Provincial Government avers
that that does not render the Policy unlawful
, ‘so long as
there is substantial compliance with the statutory safeguards and
requirements applicable to Regulations, as
indeed there has been’
.
Furthermore, the Provincial Cabinet had already approved the
wholesale revision of the regulatory framework. This framework, so

aver the First and Second Respondents, will ultimately replace large
parts of the Policy, including the ones at issue in this application.
[49]
The fourth basis advanced by Tsogo Sun for alleging that the
Provisions of the Policy are unlawful
is that it draws an irrational
distinction in respect of the exclusivity zone for the Cape Metropole
casino and other outlying
casinos whose exclusivity must be
determined by the Board. The Provincial Government avers that this
point is moot. Even if that
were not the case, so goes the
contention, there were rational grounds for allowing the Board to
manage the phased introduction
of casinos in the outlying regions of
the Western Cape and, in so doing, determine each of their
exclusivity zones.
[50]
The Provincial Government states that there is yet is another reason
why Tsogo Sun’s application
must fail. It is that the WC Act
does not currently permit the relocation of an existing casino
operation from one location to
another by means of an amendment of
the conditions of the license. A fresh license, specifying the new
premises; is required. Accordingly,
Tsogo Sun misconstrues the legal
impediment to the outcome it ultimately seeks, namely that the Board
consider and determine an
application for the relocation of one of
the outlying casinos into the Cape Metropole. The First and Second
Respondents state that
outcome cannot be achieved by way of an
application under section 41(2), which is what Tsogo Sun is asking
court to direct. This,
according to the First and Second Respondents’
contention, is particularly so because the WC Act currently does not
allow
for the relocation of existing casinos at all. Consequently,
Tsogo Sun cannot achieve the practical result it is seeking with this

application, which renders the rest of it (i.e. the parts not
directly related to section 41(2) of the WC Act) academic and
hypothetical
(in addition to their being moot and ill-founded
[51]
It will be recalled that the relief sought by Tsogo Sun is that the
court should order the Board
to consider an application by either one
of the applicants for amendment of their license under section 41(2)
of the WC Act ‘
so as to permit the holder (of the license)
to perform its licensed activities from the Cape Metropole’.
The Provincial Government states that this implies that the Board
has the power to amend the premises at which a casino is licenced
to
operate. According to the Provincial Government, that is not what
section 41(2) does. It says that:
51.1`Section 41(1)
prohibits the transfer of licenses from the holder of the license to
any other person, subject to certain exceptions.
It also provides
that premises licences cannot be transferred from one premises to
another;
51.2    A
casino operator license is not a premises license as defined in the
WC Act. It is an operator license as
so defined. However, it is a
license which is required by section 45(4) of the WC Act to specify
the premises at which the licensed
activities may take place. Not all
operator licenses provided for the WC Act are constrained in this
way:
51.3
Section 41(2), envisages an application for amendment of a license
other than a premises license ‘
if there is a charge in …
the place at which the holder of a license wishes to perform the
activities authorized thereby
which would require the conditions of
the license to be amended’.
Section 41(2) accordingly only
envisages an amendment of the conditions of license, including any
which specify the premises at
which the gambling operations are
authorized to take place.
51.4
The casino operator licenses relevant to this matter themselves
specify the location of the premises at which
the respective casinos
are licensed to operate on the face of the license. The location of
the respective casinos is not a condition
of the licenses. This is
consistent with – indeed required by – section 45(4) of
the WC Act. The reference to the addresses
of the licensed premises
in ‘each of the Applicants’ licenses, is a recordal of
what the license itself stipulates,
not a condition of the licenses.
51.5
For this reason, the relocation of either one of the Tsogo Sun
applicant’s casino operations cannot
be achieved through an
amendment of their license conditions under section 41(2).
[52]
Turning to the grounds of review raised by Tsogo Sun, the Provincial
Government avers that sections
2(4) and 2(5) of the WC Act together
make the Board’s powers to regulate the gambling industry
subject to Cabinet’s
policy determinations relating to ‘
size,
nature and implementation of the industry’
. It will be
recalled that Tsogo Sun contends that the clauses in issue do not
deal with matters that fall within the ambit of the
policy
determinations authorised by sections 2(4) the WC Act. The Provincial
Government retorts by stating that what is meant by
the
implementation of the gambling industry is more complex. It then
embarks on the definition of the word ‘implementation’

thus: The Online Oxford English Dictionary defines ‘
implementation’
as ‘the process of putting a decision or plan into effect;
execution;
similarly
,
the Online Cambridge Dictionary
defines it as ‘
the act of putting a plan into action or of
starting to use something’.
The Online Merriam-Webster
defines it as ‘
the process of making something active or
effective’.
[53]
Based on the aforegoing definition, Provncial Government contends
that the Provincial Cabinet’s
power provided for in 2(4) is
accordingly to determine the manner in which its plan for the
gambling industry is executed, as well
as to determine the nature and
size of the gambling industry. Clause 1.1(b) provides that the
regional distribution of casinos
in the Western Cape is ‘
in
order to stimulate and encourage development throughout the Province,
inter alia by the empowerment of local disadvantaged groups
through
both employment and equity ownership’.
The stated purpose
of clause 1.1 (b) is therefore that it should be a vehicle for
economic upliftment in underdeveloped areas of
the Province.  In
this way, so goes the contention, clause 1.1(b) directly contributes
to the realisation of the developmental
aims, which Cabinet had
adopted on 13 September 1995. In addition, though the regional
distribution of casinos, as well as the
limitation of the number of
casinos in well-resourced areas such as the Cape Metropole, clause
1.1(b) limits competition between
casino operators and limits access
to the lucrative Cape Metropole. In this way, the Provincial
Government further contends, clause
1.1(b) also determines the size
of the industry, collectively and in each of the regions, as well as
the protected nature of the
industry. Clauses 1.1(c) and (d), on the
other hand, protected the economic interests of casino license
operators through a ten-year
exclusively regime envisaged by section
44A of the WC Act. The Provincial Government points out that during
its operation, the
exclusive regime effectively protected casino
operators from regulatory changes that would amend the regional
distribution of casinos
put in place by clause 1.1(b). Therefore,
surmises the Provincial Government, clauses 1.1(c) and (d) similarly
had a direct impact
on the implementation of the industry, as well as
its nature.
[54]
One of the grounds of review raised by Tsogo Sun is that in adopting
the clauses in issue, the
Provincial Cabinet usurped the power and
discretion accorded to the Board by sections 37 and 41(2) of the WC
Act to determine the
conditions of license, and has thus
impermissibly attempted to override, amend or act in conflict with
the WC Act. The Provincial
Government avers that Section 37 of the WC
Act entitled ‘
Conditions applicable to licenses’
sets
out in subsections 1(a) to (o) an open list of conditions which the
Board may impose. According to it, only two of these are
relevant in
the present circumstances. First, section 37(1)(f) provides that the
Board may impose conditions ‘
relating to the premises in or
on which gambling activities take place including the development and
utilization thereof.
Second
,
section 37(1)(l) provides
that the Board may impose conditions ‘
relating to the
duration of a license’.
[55]
The interpretation accorded by the Provincial Government to 37(1)(f)
is that in the face of the
statutory requirement in section 45(4) of
the WC Act, a casino operator license must specify the premises to
which the license
attaches, and section 37(f) cannot mean that it
reserves for the Board a discretion whether or not to determine the
location of
the casino operation as part of the conditions applicable
to the license. The regional distribution of casinos is accordingly
not
a matter reserved for the Board by section 37(1)(f), which
consequently applies only to other types of licenses.
As regards section
37(1)(l) it states that Clauses 1.1(b) to (d) do not purport to deal
with the duration of casino operator licenses.
This, according to the
Provincial Government is particularly so because the casino operator
licenses in issue are granted for a
period of twelve months
(determined by the Board), and renewed annually (by the Board).
Instead, clauses 1.1(c) and (d) deal with
the length of the
exclusivity determination.  That is not a matter reserved for
the Board by section 37(1)(l). Besides, so
continues the contention,
the casino operator licences in issue expired, accordingly, the
matter is moot. It follows that the exclusivity
determinations have
been of no force or effect, and exclusivity fees have been neither
imposed nor tendered. In any event, so states
the Provincial
Government the regional distribution of casinos in the Western Cape
is currently constrained only by the following:
55.1
every casino operator license attaches to the premises specified in
the license by virtue of section 45(4)
of the WC Act;
55.2.   the WC
Act makes no provision for the amendment of the specified premises in
a casino operator license; and
55.3.   clause
1.1(b) of the Policy, read with sections 2(2) and 2(4) of the WC Act,
limit the regional distribution of
casinos in the Western Cape to one
casino in each region (and consequently preclude the Board from
granting a second casino operator
license in the Cape Metropole).
[56]
The Provincial Government says that corollary of the aforegoing is
that any relief which is said
to flow from an alleged conflict
between the Board’s power to impose conditions and clauses
1.1(c) and (d) of the Policy,
is moot.
[57]
Insofar as Tsogo Sun’s contention that the exclusivity
determination made by the Board
in the conditions is inconsistent
with section 44A which provides that ‘
the Board shall grant
to such license holder exclusivity to operate a casino within an area
and for a period as determined by the
Board’,
the
Provincial Government avers that that contention must fail for the
following reasons:
57.1
First, the regional distribution of casinos in the Western Cape is a
different matter to the exclusivity
determination envisaged in
section 44A, and as earlier contended, the latter issue is moot;
57.2
Second, the Board supported and amended the proposed clauses 1.1(c)
and (d) of the Policy when it was drafted;
and
57.3
Third, by virtue of section 81 of the WC Act, again as earlier
contended, section 2(4) of the WC Act, section
44A does not vest the
Board with a discretion regarding the period or region of exclusivity
but merely mandates it to implement
the exclusivity determination
made in regulation or the Policy.
[58]
It is well to restate that Tsogo Sun also alleges that when Cabinet
made the Policy, it purported
to exercise a power granted to the
Second Respondent by section 81 of the WC Act to make Regulations. To
recap, 81(1) gives the
‘
responsible Member’
the
power to make Regulations in respect of:
(d)
the maximum permissible number of licenses of any particular kind
that may from time to time be granted in a particular area;
…
(f) the granting of
exclusive rights to the holder of a casino operator license for any
period and in respect of any area;
(g) any other matter
that may be relevant to the establishment of casinos in the Province;
The Provincial Government
avers that contrary to what Tsogo Sun alleges, at the time that the
Policy was adopted, the Member of
the Executive Council responsible
for the administration of the WC Act was the then Premier. It is the
Premier who introduced the
Policy to the Provincial Cabinet, and the
resolution for its adoption was supported by the Premier and all the
other members of
the Cabinet. However, they concede that section 81
of the WC Act imposes specific requirements on the making of
Regulations that
do not ordinarily attach to the making of policy
determinations. They are the following:
58.1.   the
making of certain Regulations, require consultation with the Board;
and
58.2
Regulations with financial implications shall only be made with the
concurrence of the Minister responsible
for Finance.
In addition, publication
in the
Provincial Gazette
is a requirement for the valid
making of Regulations.
[59]
The Provincial Government states that in the case of the Policy in
issue, each of these requirements
has been substantially complied
with (i.e. there has been compliance with the purpose of each of
them) in that:
59.1.   the
Board was consulted and provided extensive comment on the Policy;
59.2    as
explained above at para 24.2, the Policy was adopted unanimously and
accordingly supported by the Finance
Minister Mr Meiring; and
59.3.
finally, as required by section 2(6) of the WC Act, the Policy was
published in the
Provincial Gazette
, as appears from the
extract attached to the founding affidavit
.
[60]
With regard to the cautionary note in the
Akani
judgment, to
the effect that it is undesirable to introduce a third type of
statutory instrument, i.e. the Policy, into the regulatory
framework
that governs gambling, the Provincial Government contends that this
does not render the Policy unlawful, so long as there
is substantial
compliance with the statutory safeguards and requirements applicable
to Regulations, as indeed there has been. Furthermore,
the Provincial
Cabinet has already approved the wholesale revision of the regulatory
framework which IS in now in train. According
to Provincial
Government, this framework will ultimately replace large parts of the
Policy, including the ones at issue in this
application.
[61]
Tsogo Sun alleges that the Policy irrationally distinguishes between
Cape Metropole casino, whose
exclusivity zone was determined in the
Policy, and the other casinos, whose exclusivity zone was left for
the Board to determine.
The Provincial Government reiterates
that any attack based on the exclusivity regime put in place by
clauses 1.1 (c) and (d) of
the Policy, read with section 44A of the
WC Act, is moot for the reasons already given. Even if that was not
the case, so they
allege, there is a rational explanation as to why
the exclusivity zone for the Cape Metropole Casino was determined in
the Policy
while the others were left for the Board to decide:
61.1
Casino gambling in the Western Cape was to be phased in, beginning
with the best-resourced region and then
proceeding to regions most in
need of development. The Provincial Government explains that the last
casino license, in respect
of the Worcester casino, was only granted
in May 2005, some seven years after the Policy had been approved. In
those circumstances,
it was reasonable to leave the determination of
the exclusivity zone applicable to the other regions for the Board to
decide at
later stages, based on current information;
61.2.   The
Board had material input into the determination of the Cape
Metropole’s exclusivity zone as well.
[62]
For the aforegoing reasons, the Provincial Government denies that
there was any irrationality
in distinguishing between the Cape
Metropole region and the outlying regions. For all these reasons, the
Provincial Government
asks that the application be dismissed with
costs.
The SISA respondents’
answering affidavit
[63]
The fifth and sixth respondents in an affidavit deposed to by Ms
Annabele Thomas, the Group Manager: Sun
International (South Africa)
Limited (“SIML”)
,
advance reasons why they oppose this application.
SIML is the manager of SunWest, the fifth respondent. For ease of
reference, the
fifth and sixth respondents will be referred to,
henceforth as the SISA respondents
.
[64]
The background to this application has already been set out, and it
is largely uncontested, but
in order to understand the full context
of the SISA respondents’ opposition, it is necessary to give
the brief background
alluded to by Ms Thomas in the founding
affidavit. The SISA respondents affirm that in 2015, SISA sought a
review of the decision
by the Cabinet of the Provincial Government of
the Western Cape to abolish future exclusivity in the gambling
industry, on the
recommendations of the Western Cape Gambling and
Racing Board. It is common cause that Tsogo Sun too launched the
present application
during December 2015, seeking a declaratory order
to the effect that there was nothing in the applicable legislation
which prevented
the Gambling and Racing Board from considering an
application to amend the casino licences issued in the Western Cape
so as to
allow their relocation to cape Town. However, both
applications were stayed by agreement between the parties, namely,
SISA, Tsogo
Sun and the Provincial Government of the Western Cape.
This was followed by proposals to the amendment of existing
regulations,
which according SISA, were aimed at abolishing casino
licence exclusivity for specific relocation of outlying casinos in
the Cape
Metropole. It is for this reason that the SISA respondents
are astounded by the applicant’s revival of this application in

the current proceedings. The SISA respondents, oppose this
application for several reasons.
[65]
With regard to Tsogo Sun’s contention to the effect that the
provisions of the Policy Determinations
are
ultra vire
s to the
extent that they conflict with the WC Act, the SISA respondents
oppose each of the grounds raised.
[66]
They contend that the impugned provisions of the Policy
Determinations are
intra vires
section 2(4) of the Western
Cape Act. The reasons advanced for the contention are the following:
66.1
Section 2(4) of the WC Act provide thats the main objective of the
Board is to control gambling incidental
activities in the Province,
“
subject to this Act and any policy determinations of the
Executive Council relating to the size, nature and implementation of
the
industry.”
66.2
Section 2(4) makes it plain that the Board’s power to control
gambling is subject to two constraints.
The first constraint is
provided by the WC Act itself. The second constraint is provided by
policy determinations made by the Executive
Council in relation to
the size, nature and implementation of the gambling industry.
66.3
Paragraph 1.1 (b) of the Policy Determinations provides that there
will be five casino operator licences
in the Western Cape – one
in each of the five regions. This paragraph of the Policy
Determinations relates to “the
size, nature and implementation”
of the gambling industry, since it determines how many casinos there
will be in the Western
Cape (i.e. five) and where they will be
located (i.e. in the five different regions). According to the SISA
respondents, it therefore
falls within the ambit of 2(4) of the WC
Act.
66.4
Regarding paragraph 1.1 (c) of the Policy Determinations, the SISA
respondents aver that this paragraph relates
to “
the size,
nature and implementation”
of the gambling industry, since
it determines that a casino will not face competition from another
casino in the same region. Thus,
so they contend, it falls within the
ambit of section 2(4) of the WC Act.
66.5
Paragraph 1.1 (d) of the Policy Determinations provides that the
exclusivity zone for the Cape Metropolitan
will be 75 kilometres
radius from the City Hall in Cape Town. The SISA respondents maintain
that this paragraph of the Policy Determinations
relates to “the
size, nature and implementation” of the gambling industry,
since it determines exclusivity that will
be enjoyed by the casino
located in the most lucrative of the five regions. For this reason,
it falls within ambit of section 2
(4) of the WC Act.
The SISA respondents
further contend that the aforegoing analysis shows that the impugned
provisions of the Policy Determinations
are
intra vires
.
[67]
I now turn to consider the SISA respondent’s contention to the
effect the Policy Determinations
are not inconsistent with the WC
Act.
[68]
It will be recalled that Tsogo Sun contends that sections 37 and
41(2), WC Act confers on the
Board the power and discretion to grant
applications, and determine conditions of licences, and that power
and discretion cannot
be removed by the Policy Determinations such as
in
casu
. Tsogo Sun in its founding affidavit lists sections
37, 41 (2) and 44 A as being inconsistent with the Policy
Determinations. To
recap, section 37 (1) of the WC Act, provides that
the Board may impose conditions in respect of any licence issued
under the Act.
According to the SISA respondents, the Board’s
power to impose conditions in terms of section 37 (1) must be read
subject
to section 2(4). When it is read with section 2(4), it
becomes clear that the Board’s power to impose conditions is
subject
to the WC Act and any policy determinations of the Executive
Council relating to the size, nature and implementation of the
industry.
The SISA respondents maintain that the list of conditions
set out in in section 37 (1) paragraph (a) to (o) does not include
conditions
relating to exclusivity. Therefore, the impugned
provisions of the Policy Determinations do not deal with the Board’s
power
to impose conditions dealing with the matters listed in 37(1)
(a) to (o).
[69]
The SISA respondents reason that the Board’s residual power to
impose conditions in terms
of section 37 (1) does not include the
power to impose conditions relating to exclusivity, since exclusivity
is regulated by section
44 A of the WC Act. Furthermore, so goes the
contention, even if the court were to find that the impugned
provisions of the Policy
Determinations deprive the Board of a
residual power to impose conditions relating to exclusivity in terms
of section 37(1), there
would be no inconsistency between the Policy
Determinations and the WC Act since section 2(4) provides that the
Board’s power
to impose conditions in terms of section 37 (1)
is subject to the Policy Determinations. Put differently, section
2(4) provides
that the Board may not exercise a power that it might
otherwise have exercised if the Executive Council has made a policy
determination
relating to that matter. In addition, since the
inability of the Board to exercise such a power is contemplated by
section 2(4)
of the Act, the existence of a policy determination does
not produce an outcome that is inconsistent with the Act.
[70]
The SISA respondents further contend that there is no inconsistency
between the Policy Determinations
and the WC Act since section 2(4)
provides in express terms that the Board’s powers are “subject
to” the Policy
Determinations. According to this contention, if
Tsogo Sun’ complaint is that section 2(4) may not permissibly
authorise
the Executive Council to make a policy directive, depriving
a Board of a power that it has under the WC Act, then they were
required
to challenge the legality of section 2(4). They have not
done so. The SISA respondents aver that it therefore must be assumed
that
section 2 (4) lawfully empowers the Executive Council to make a
policy determination depriving the Board of a power that it would

otherwise have had in terms of the WC Act. They further emphasise
that Tsogo Sun’s failure to challenge the legality of section

2(4) is fatal to its case.
[71]
Regarding section 41 (2) of the WC Act authorising the Board to amend
a licence, the SISA respondents
assert that the impugned provisions
of the Policy Determinations deprive the Board of the power it would
otherwise have had to
amend a casino licence. According to the SISA
respondents, there is however no inconsistency between the Policy
Determinations
and the WC Act since section 2(4) provides in express
terms that the Board’s power to amend a licence in terms of
section
41 (2) is subject to Policy Determinations. Put differently,
section 2 (4), properly interpreted, states that the Board may not

exercise a power of amendment in terms of section 41(2) if such an
amendment is inconsistent with a policy determination of the

Executive Council. Accordingly, so contend the SISA respondents, if
Tsogo Sun maintains that section 2(4) may not permissibly authorise

the Executive Council to make a policy directive depriving the Board
of a power that it has under the WC Act, then the applicants
were
required to challenge the legality of section 2 (4).
[72]
The SISA respondents advance the same logic and reasoning as above
with regard to powers of the
Board to grant a licence holder
exclusivity as provided for in section 44 A (1) of the WC Act.
According to this assertion, the
lack of inconsistency between the
Policy Determinations and WC Act is apparent from the provisions of
section 1 (c) of the Policy
Determinations which specifically
provides that the required exclusivity fees are to be determined by
the WC Act. They aver that
because section 2(4) provides that the
Board’s powers are subject to the Policy Determination, there
therefore is no inconsistency
with the WC Act.
[73]
Turning now to Tsogo Sun’s contention that the Executive
Council has usurped the powers
of the Minister, I must recap the
provisions of section 81. Section 81 (1) of the WC Act provides that
the Minister may make regulations
on various matters, including:
73.1
the maximum permissible number of licences of any particular kind
that may from time to time be granted in
a particular area; and
73.2
the granting of exclusive rights to the holder of a casino operator
for any period and in respect of any
area.
[74]
The SISA respondents contend that the legislature through section
81(1), has empowered the Minister
to deal with casino operating
licences by way of Regulations. But the legislature has also
authorised the Executive Council to
deal with the same matters by way
of policy determinations relating to “
the size, nature and
implementation of the industry
.” Stated in another way, the
legislature has authorised both the Minister and the Executive
Council to deal with the same
matters- the former by way of
Regulations, and the latter by way of policy determinations. The SISA
respondents further allege
that in the present matter, the Minister
has not made any regulations dealing with exclusivity. They further
state that if Tsogo
Sun’s case is that the legislature may not
permissibly authorise the Executive Council and the Minister to deal
with the
same topic, then the applicants ought to have challenged the
legality of section 2(4). Having failed to do so, so goes the
contention,
it must be accepted that section 2(4) lawfully empowers
the Executive Council to make a policy determination dealing with the
matters
that may be regulated by the Minister in terms of section 81.
[75]
One of the grounds of review raised by Tsogo Sun is that paragraph 1
(d) of the Policy Determinations
which deals with size of the
exclusivity zone for the Cape Town Metropole casino while leaving the
Board at large to determine
the size of exclusivity zone for other
regions, draws an arbitrary and irrational distinction between the
casino in the Cape Town
metropole casino and outlying casinos. The
SISA respondents allege that there is nothing irrational or arbitrary
with the Policy
Determinations because they do not define the borders
of the Cape Metropole region as they merely provide that the
exclusivity
zone will be a 75 km radius measured from the City Hall
of Cape Town. According to this contention, the singling of the Cape
Town
Metropole region in the Policy Determinations is rationally
connected to a legitimate government purpose in that the intention of

the Executive Council is to develop a world class casino that would
attract visitors to Cape Town.
[76]
Primarily, for all the aforegoing reasons, the SISA respondents ask
that Tsogo Sun’s application
be dismissed. Insofar as Tsogo
Sun’s seeking an order setting aside the impugned provisions of
the Policy Determinations
and an order declaring that the Board is
competent to consider an application under section 41(2) of the WC
Act for a casino operator
licence to be relocated to the Cape Town
Metropole and an order directing the Board to consider such an
application, the SISA respondents
submit that if Tsogo Sun failed to
have the impugned Policy Determinations set aside, they obviously
must fail in their bid to
have the Board declared competent to
consider an application under section 41 (2) of the WC Act for a
casino operator’s licence
to be relocated to the Cape Metropole
region.
[77]
The SISA respondents concede that a casino operator licence is not a
premises licence as alleged
by the Board. This according to their
averments is because section 1 of the WC Act defines a “premises
licence” as
any licence referred to in section 27 (c), (dA) and
(kA), and therefore, a casino operator’s licence does fall
within the
ambit of these sections. In short, they agree with Tsogo
Sun that a casino operator’s licence is not a premises licence.
[78]
According to the SISA respondents, this application should be
dismissed as Tsogo Sun has not
made out a proper case for the relief
sought. However, should the court find the Policy Determinations to
be invalid, then the
remedy that is just and equitable is the
suspension of the declaration of invalidity in order to allow the
Executive Council to
correct the defect, alternatively allow for the
finalisation and implementation of the amendment legislation, in line
with section
172 (1)) (b) of the Constitution.
The
Provincial Governments’ supplementary answering affidavit
[79]
The Provincial Government filed an application seeking to have the
supplementary answering affidavit
deposed to by Mr David Savage to be
admitted in these proceedings. In addition, they sought that the
hearing of this matter be
postponed
sine die
and that there be
no order as to costs, alternatively, that all questions of costs
stand over for later determination. None of
the parties objected to
the filing of the affidavit, and the application was granted. After
the matter was heard on 26 May 2020,
I issued an order dismissing the
application for postponement and undertook to furnish reasons for the
order in the main judgment.
[80]
I first summarise the contents of the supplementary answering
affidavit.
[81]
The factual background alluded to earlier in this judgment reveals
that on 13 February 2019,
the Provincial Cabinet approved the
introduction of the Nineteenth Amendment Bill and on 21 February
2019, to the Provincial Parliament.
[82]
In the supplementary answering affidavit, the Provincial Government
outlines the events that took place
after it had filed its answering
affidavit on 29 April 2019, and explains that the relevant officials
had been working in parallel
on three draft Bills, namely:
82.1
the reduced Draft Nineteenth Amendment Bill, which deals with matters
not directly relevant to the issues
raised for decision in this
application.  The Provincial Government states that on 2 May
2019, the aforementioned Bill was
published for comment under
Provincial Notice 54 /2019 in Provincial Gazette 8088. As the
legislative process in relation to that
Bill was automatically
terminated by operation of law, upon dissolution of the Provincial
Parliament to allow for national and
provincial general elections on
8 May 2019, the Bill had to be re-introduced to the Provincial
Parliament. This was done on 30
January 2020. However, the
publication of the reduced Nineteenth Amendment Bill by the
Provincial Parliament for comment was delayed
due to the Covid-19
pandemic, thus it occurred on 24 April 2020; and
82.2
the Draft WC Act Twentieth Amendment Bill and the Draft WC Act
Twenty-First Amendment Bill, which, together,
will provide the
framework for the future regulation of casinos in the Western Cape
and are relevant to the issues raised for decision
in this
application.
[83]
According to the averments of the Provincial Government, in the
months following the 8 My 2019
general elections, the Provincial
treasury and its advisers considered a range of complex,
inter-related issues arising from or
relevant to the extensive
comments received on the Draft Nineteenth Amendment Bill. These were
the following:
83.1
the argument by Sun International against a new casino in the Table
Bay region in the Cape Metropole, including
that it would be likely
to cannibalise the customer base of the sole existing casino in the
Cape Metropole (i.e. Sun International
GrandWest casino, situate in
Goodwood;
83.2
the identification of the Heldeberg area in the Cape Metropole as an
area which is underserviced by casino
gambling infrastructure and has
limited spatial overlap with the areas from which the Grand West
casino draws most of its customers;
83.3
the anticipated future GGR by the casinos in the Western Cape;
83.4
the structure of the provincial gambling tax applicable to the
casinos; and
83.5 the implications for
the Provincial Government’s total gambling tax income of a
shift in gambling from the GrandWest
casino to any new casino(s)
which may be permitted in the Cape Metropole.
[84]
The Provincial Government further divulges that on 4 December 2019,
it approved the preparation
of new draft legislation, which, amongst
other things, would permit the Board to consider and approve the
relocation of one of
the existing casinos into the Helderberg area,
and if the approval is granted would provide for a reduced area of
exclusivity for
the GrandWest casino, and would further deal with
financial, taxation and other related matters. According to this
explanation,
to give effect to that decision, the following were
prepared:
84.1
the Draft Twentieth Amendment Bill as well as the Draft Twenty-First
Amendment Bill Amendment Bill;
84.2
the necessary draft formal memoranda describing the objects and
content of the two Bills;
84.3
draft amendment to the Western Cape Gambling and racing Regulations
(Fees and Costs), 2016;
84.4
draft amendments to the Western Cape Gambling and Racing Regulations,
1996; and
84.5
the draft notice of formally withdrawing the Policy.
[85]
According to the Provincial Government, on 23 March 2020, the Board
was invited to provide written
comments on the then draft Twentieth
Amendment Bill by 3 April 2020, and which comments were considered
and incorporated in what
is now the Draft Twentieth Amendment Bill.
On 6 May 2020, the Provincial Cabinet considered and approved the
publication
for comment of the Draft Twentieth and Twenty-First
Amendment Bills. On 8 May 2020, the Draft Twentieth and Twenty-First
Amendment
Bills, along with their explanatory memoranda and
accompanying draft amendments regulations were published for comment
in
Western Cape Provincial Gazette Extraordinary
No.8235.
[86]
The Provincial Government avers that the Draft Twentieth Amendment
Bill, if enacted, will empower
the Board to consider, and if it is
satisfied that the criteria prescribed in the new legislation are
met, approve applications
for the relocation of any licensed casinos
in the Province, including applications for the relocation of one of
them into the part
of the Helderberg area, which is more than 75km
from the current location of the GrandWest casino. Furthermore, the
new legislation
will also allow the Board, when it approves the
relocation of any casino, to impose conditions. Such conditions may
include requiring
the casino operator to continue complying with the
conditions of its existing casino operator’s licence which
requires contributions
to black economic empowerment and corporate
social investment in the area from which the casino is to be
relocated, for a period
agreed between the applicant and the relevant
beneficiaries, failing which, a period of two years, calculated from
date on which
the relocated casino commences operations. In addition,
it will create:
86.1    a
20-year exclusivity areas for all casinos in the Province and require
payment of annual exclusivity taxes
by operators of those casinos,
the rate of the tax (i.e. either 0.25% or 2.55%) of their taxable
revenue) being determined by their
annual GGR in the previous year
(i.e. up to R300 million and above).
86.2    in
the event of a relocation to the Helderberg area, a 25 km radius for
the determination of GrandWest’s
20-year exclusivity; and
86.3    a
new exclusivity area in the Helderberg area region of the City of
Cape Town Metropole, which is outside
the 25 km radius of GrandWest’s
exclusivity area.
[87]
According to the Provincial Government, the new legislation will
create a new once-off economic
opportunity tax of R177.5 million in
2020 terms to be paid by the successful applicant, for permission to
relocate to a casino
to the Helderberg area.
The postponement
application
[88]
I have already indicated that the Provincial Government on 8 May
2020, applied for the postponement
of this matte
r sine die
with no order as to costs. After hearing the postponement
application, I issued the following order on 1 June 2021:
“
1.
The first and second respondent’s application for postponement
is refused.
2.
Costs are reserved for later determination.
3.
Reasons for the order will be given in the judgment on the merits.”
[89]
These are the reasons for the order.
[90]
The main basis for the postponement application as discernible from
the Provincial Government’s
affidavit  is that (a) the new
legislation, if enacted, will permit any of the casinos in the
Province (i.e. any of the applicants
and the fourth and fifth
Respondents) to apply to relocate their casinos to any area within
the Cape Metropole (i.e. the Helderberg),
(b) will fix the criteria
which any application for relocation must meet, (c) will empower the
Board to grant one such application,
and (d) will deal with the
fiscal and other consequences of the granting of any such application
(including the area of exclusivity
of the new casino). Furthermore,
upon the commencement of the Western Cape Twentieth Gambling and
Racing Amendment Act, 2020, the
provisions of the Policy that relates
to casinos and which are at issue in this litigation, will be
withdrawn. Accordingly, the
new legislation, once enacted,
promulgated and brought into effect, will render moot the relief
sought in these proceedings.
[91]
It is further contended on behalf of the Provincial Government that a
postponement
sine die
will be in the interests of justice for
the following reasons:
91.1
the public comment of the legislative process which, if successful,
will result in amendments to the Act
that will render moot the relief
sought in these proceedings;
91.2
the principles of the separation of powers and of participatory
democracy in our Constitution, which together
require that the
Provincial Parliament, following a proper process of public
consultation, be given the opportunity to make legislation
regulating
the complex issue of the relocation of any of the outlying casinos
into the Cape Metropole and the consequences thereof;
91.3
the limitations on the ordinary functioning of this Court during the
current Alert Level in the national
state of disaster, which, require
that its judicial and administrative resources be applied to matters,
unlike the present, which
must be heard and determined during the
national state of disaster; and
91.4 The Provincial
Government further avers that none of the parties will be prejudiced
if the matter is postponed
sine die
because the parties agreed
that should the court find the Policy Determinations to be invalid
and of no force and effect, such an
order should be suspended for a
year give the Provincial Government space to make the necessary
legislative changes.
Tsogo Sun’s
response to the postponement application
[92]
Tsogo Sun, in an affidavit deposed to by its attorney, Ms Hester
Gestruida Brand do not oppose
the admission of the supplementary
affidavit of David Savage. However, they oppose the postponement
application. The basis for
the opposition is mainly the Provincial
Government’s contention that new draft bills, which were
published for comment on
8 May 2020, will, if enacted, render the
present proceedings moot. According to Tsogo Sun, for the last eight
years, various drafts
of bills have been published to cater for the
relocation of an outlying casino and none ever came to fruition.
Furthermore, the
draft Bills have not been formally tabled before the
Provincial Legislature and have thus far been tabled for public
comment and
there is no guarantee that they will be enacted at all.
To compound matters, so contends Tsogo Sun, after the participation
process,
the Legislature must deliberate on the Bills, and there is
no certainty that they will be enacted in their present form.
[93]
As to the second ground, namely, that based on the principles of the
separation of powers and
of participatory democracy, the Provincial
Parliament must be given an opportunity to make legislation
regulating the issue of
an outlying casino into the Cape Metropole,
Tsogo Sun retorts by stating that the relief sought in the present
application will
not preclude the Provincial Parliament from making
legislation to regulate the pertinent issue for two reasons:
93.1    In
its answering affidavit, the Provincial Government asks that if the
court is minded to declare any part
of the Policy invalid, such order
be suspended for a year so as to permit the process of putting in
place a new regulatory framework.
The SISA respondents make an
identical proposal.
93.2
Notwithstanding the fact that the order sought by Tsogo Sun would not
leave a lacuna in the statutory regime,
Tsogo Sun does not object to
the suspension of the order for a year as sought by all the
respondents.
Tsogo Sun avers that
since all the parties agree that if the main application succeeds,
the Provincial Legislature would be given
a year to deal with this
issue, there therefore is no prejudice to the separation of powers or
participatory democracy arising
from the relief sought.
[94]
With regard to the allegation that the matter is not sufficiently
pressing to be heard during
the national lockdown, Tsogo Sun avers
that this argument is in direct contrast to the directives of the
Chief Justice and the
Judge President of this Court. Tsogo Sun
emphasises that in paragraphs 13 and 14 of the directives of the
Chief Justice of 6 May
2020, the Chief Justice does not suggest that
opposed matters should not proceed unless it is necessary for them to
be determined
during the state of national disaster. Instead, parties
are urged to endeavour to reach agreement regarding dispensing with
oral
argument and, if they do not agree, the matter should be heard
by way of video-conferencing. Likewise, so continues the contention,

the Judge President’s directives were to the effect that
Judicial Officers were to consider options to proceed with cases
with
minimal contact between themselves, court personnel, legal
practitioners and litigants and that virtual hearings where possible

were to be preferred. According Tsogo Sun, in the present matter, the
parties had already agreed that a hearing via Microsoft Teams
would
be appropriate.
[95]
As to the Provincial Government’s averment to the effect that
none of the parties will
be prejudiced if the matter is postponed
sine die
, Tsogo Sun contends that Tsogo Holdings as far back
as 11 November 2015, wrote to the Board expressing the intention of
one of
the applicants to submit an application to the CEO of the
Board for the amendment of the casino operator licences so as to
permit
the performance of the licensed activities from premises in
the Cape Metropole. This remains its intention, and to this end, it

requires a declaratory order from the court which will allow such an
application. It would be prejudicial to Tsogo Sun to allow
an invalid
Policy to stand. This is especially so because if the legislative
process comes to naught in a year’s time, the
matter would have
to be re-renrolled and the respondents would still seek the
suspension of the declaration of invalidity for year,
to the
prejudice of the applicants.
The Provincial
Government’s reply in the postponement application
[96]
The Provincial Government ripostes to Tsogo Sun’s opposition to
the postponement application
by stating the latter’s summary of
the events leading to the recent publication of the draft Nineteenth
and Twentieth Amendment
Bills is incomplete and may create an
impression that the former was lax and inactive in pursuing the
legislative amendments. They
then provide a detailed outline of steps
taken in an attempt to bring the legislative amendments to fruition.
I do not propose
to outline those steps as they have been fully
detailed in the Provincial Government’s answering affidavit.
Suffice to state
that the Provincial Government emphasises that the
regulation of gambling in the Western Cape is a complex undertaking
as it must
take into account a range of interests, some of which are
in conflict with one another, including the following:
96.1
The public interest in an ensuring an optimal balance of potential
socio-economic costs and benefit, including
for example,
opportunities (which includes job creation, tourism stimulus and
infrastructure development), on the one hand and
undue stimulation of
potentially socially detrimental behaviour. (including addictive
gambling) on the other hand;
96.2
The Provincial Government’s interest in ensuring in ensuring
optimal revenue collection in the form
of a gambling tax levied on
casinos’ Gross Gambling Revenue as well as own other potential
levies, which constitute a very
significant source of own income for
the Provincial Government.;
96.3
The financial interest of Sun International in maintaining an area of
exclusivity around its Grand West Casino;
96.4
The financial interest of Tsogo Sun in being able to compete with Sun
International for the opportunity to
relocate an outlying casino into
part of the Cape Metropole outside the Grand West Casino’s new
area of exclusivity.
[97]
The Provincial Government counters Tsogo Sun’ assertion that
for the last eight years there
have been draft Bills to address the
issue of exclusivity none of which came to fruition, by stating the
introduction of a new
legislative regime to regulate the operation of
casinos in the Western Cape must take all of the aforementioned
interests into
account. It further states that putting such a regime
in place is a complex exercise. Besides, so alleges the Provincial
Government,
significant progress has already been achieved because on
6 May 2020, the Provincial Cabinet considered and approved the
publication
for comment of the draft Twentieth and Twenty-First
Amendment Bills. Likewise, on 8 May 2020, the draft Twentieth and
Twenty-First
Amendment Bills, along with their explanatory memoranda
and various draft regulations, were published for comment. In
addition,
the different actions brought by the casino operator
licensees and their changing stances contributed to the delay in
having the
draft Bills made law.
[98]
According to the Provincial Government, no prejudice would be
suffered by Tsogo Sun if the postponement
was granted because it
(Tsogo Sun), accepted that the effect of the suspension of the
declaration of validity would be that the
mandatory order that the
Board consider and determine the application for relocation they are
seeking would be deferred pending
the outcome of the amendment of the
regulatory framework. This means that during the one-year period of
suspension Tsogo Sun has
agreed to, the Board will not be obliged by
an order the court may make, to accept and consider an application by
Tsogo Sun for
the relocation of one of its casinos into the Cape
Metropole. It follows, so continues the contention, that a hearing of
the matter
would achieve very little, whereas a postponement
sine
die
would permit any of the parties to enrol the matter for a
hearing if the current process for the regulatory framework started
by
the publication of the draft Twentieth and Twenty-First Amendment
Bills came to nothing.
[99]
The Provincial Government further reiterates that the determination
of this matter ought not
to be a priority given that Tsogo Sun
accepts that justice and equity require that any relief granted may
be suspended for a period
of a year, This is particularly so in the
light of the fact that the underlying problem which Tsogo Sun raises
is being addressed
by a legislative process which is underway and
that there are other pressing matters which should be determined
during the national
state of disaster.
The position of the
SISA respondents
[100]   The
SISA respondents do not oppose the postponement application and
advance the following reasons for supporting
it:
100.1  Expending
judicial and party resources on the determination of an application
that has been overtaken by these events
and to consider relief that
is likely to be moot is undesirable;
100.2 No prejudice arises
to any party with a postponement
sine die
since the matter can
always be enrolled at a later stage once the progress of the new
legislative programme can be ascertained
and evaluated.
100.3  Inconvenience
and potential confusion will inevitably arise if this application
proceeds while a comprehensive overhaul
of the provincial approach to
relocation of casinos is undertaken.
100.4  Determining
the application now and granting the relief sought places the
Provincial Government of the Western Cape
and the Western Cape
Gambling and Racing Board in an untenable position- it would be
required to “
consider and decide”
an application
for relocation in terms of stale and outdated policy considerations,
and in terms of legislative and regulatory
framework that has an
imminent expiry date. According to the SISA respondents, the Board is
likely to refuse the application given
the changes on the horizon,
thereby retaining the applicants ‘
status quo
position;
and
105.5  In the sum,
the determination of this application is unlikely to alter the
current status and position of the parties.
[101]
Accordingly, so contend the SISA respondents, this application should
be postponed
sine die
, so as to enable the Provincial
Government to advance through to the public comment and final
promulgation stages.
[102]   I now
turn to evaluate the merits of this application.
Evaluation:
postponement application
[103]   The
principles applicable to an application for the postponement of a
matter have been restated in
Lekolwane v Minister of Justice
as follows:
“
[17]
The postponement of a matter set down for hearing on a particular
date cannot be claimed as a right. An applicant
for a postponement
seeks an indulgence from the court.  A postponement will not be
granted, unless this Court is satisfied
that it is in the interests
of justice to do so.  In this respect the applicant must
ordinarily show that there is good cause
for the postponement.
Whether a postponement will be granted is therefore in the discretion
of the court.  In exercising
that discretion, this Court takes
into account a number of factors, including (but not limited to)
whether the application has
been timeously made, whether the
explanation given by the applicant for postponement is full and
satisfactory, whether there is
prejudice to any of the parties,
whether the application is opposed and the broader public interest.
All these factors, to
the extent appropriate, together with the
prospects of success on the merits of the matter, will be weighed by
the court to determine
whether it is in the interests of justice to
grant the application.” (footnotes omitted)
[104]   Against
this backdrop, I assess whether it is in the interest of justice to
grant the postponement. In so doing,
I commence with the Provincial
Government’s contention that the present matter ought not to be
entertained during the prevailing
state of national lockdown. It must
be stated from the outset that the tenor of the of the directives of
the Chief Justice of 6
May 2020, is not that matters should not
proceed, but that contact between the parties, the court and the
litigants should minimised
to curb the spread of the COVID-19 virus.
It is precisely for this reason that the Chief Justice in the
directives recommended
virtual hearings, where possible. In the
matter at hand, the parties had already decided prior to the
launching of the postponement
application that the proceedings would
the virtual, thereby complying with the directives of 6 May 2020. In
my judgment, the national
lockdown could as such not be the basis on
which an application for a postponement is justified.
[105]
Regarding the Provincial Government’s argument that the
postponement ought to be granted because the  new
draft bills
were published for comment on 8 May 2020, will, if enacted, render
the present proceedings moot. This contention disregards
the fact
that the main application raises serious issues of legality or
illegality of the Policy Determinations. Such a determination
is
inextricably linked to the ends of justice and good governance. For
this reason, the fact that the issues will at some stage
become moot
can hardly meet the threshold of interests of justice.
[106]   Relying
on the judgment in
Mazibuko v Sisulu and Another
2013 (6) SA
249
(CC), counsel for Tsogo Sun contended that the application for
postponement is not sustainable in law. This contention touches on

two issues, namely, the separation of powers and the fact that
strides have already been made by the Provincial Government towards

enacting legislation which deals with the exclusivity regime. Counsel
for the Provincial Government submitted that Tsogo Sun’s

reliance on
Mazibuko
is misplaced as the said case “
dealt
with an application for direct access to the Constitutional Court,
which, if not granted, would have left the applicant without
a
remedy.  It speaks to the question whether the applicant was
entitled to have its case considered at all.  It is not

analogous to an application for a postponement like the present.”
It indeed is so that
Mazibuko
dealt with an application for direct access to the
Constitutional Court, however, the basis for the application has a
direct bearing
on the principles I have already referred to above. At
paragraph 47, when summarising the question of direct access, the
court
said the following:
“
[47]
The Speaker urged us to dismiss the direct access application because
the applicant should have exhausted
the internal remedies by
approaching the assembly to resolve the deadlock in the programme
committee before rushing to court. He
also argued that there was no
need for this court to make an order even if it found for the
applicant on the lacuna on the rules
because the assembly was
reforming its rules to correct the defect. He in effect argued that
the exercise of jurisdiction would
offend the separation-of-powers
doctrine in light of the aforegoing negotiations within the
assembly.”
As can be discerned from
the aforegoing, the pertinent issues raised in
Mazibuko
are
not dissimilar to the issues raised in
casu
, it therefore is
pivotal to consider the reasoning of the Court in dealing with them.
In holding that the direct access application
must, in all the
circumstances succeed, the Court said the following:
“
69.
The
lack of consensus on the draft Rules is not surprising. Given their
respective submissions in this Court, there
are
fundamental differences between the applicant and Chief Whip on
whether the Rules are constitutionally deficient and therefore
what
the Rules should provide for in relation to a motion of no confidence
in the President. If this dispute is not resolved by
this Court, the
differences are likely to persist, to the detriment of a member of
the Assembly who wishes to exercise the right
envisaged in section
102(2).
“
70
I am therefore unable to agree with the contention of the
Speaker that because the parties are in the process of remedying
the
alleged lacuna in the Rules the direct access application should be
dismissed. First, the differences between the applicant
and Chief
Whip make it most improbable that the lacuna will be corrected.
Second, once we have found, as we have, that the Rules
regulating the
business of the Programme Committee are unconstitutional, we must so
declare. An order of constitutional invalidity
is not discretionary.
Once the Court has concluded that any law or conduct is inconsistent
with the Constitution, it must declare
it invalid.
71
I
also do not agree
with the submission that a declaration of invalidity would trench
upon the separation of powers doctrine. An order
of constitutional
invalidity would not be invasive because it is declaratory in kind.
The Court would not be formulating Rules
for the Assembly. The Court
would be properly requiring the Assembly to remedy the constitutional
defect that threatens the right
of members of the Assembly.”
(footnotes omitted)
[107]   The
above conclusion makes it plain that although the
Mazibuko
matter involved the issue of direct access, it is analogous to the
matter at hand. This I say because the main basis for the application

for the postponement in the present matter, is that legislation to
regulate the relocation of outlying casinos, is according to
the
Provincial Government at an advanced stage and it is therefore
premature for this court to pronounce on the invalidity of the
Policy
Determinations created to deal with same. Furthermore, such a course
would hinge on the separation of powers. I have earlier
on expressed
that this court is obliged to determine the issue of the legality or
illegality of the Policy Determinations assailed
by Tsogo Sun. It
cannot shun this responsibility simply because there is legislation
in the pipeline dealing with same. From these
papers, it is clear
that the legislation regulating the relocation of outlying casinos,
has indeed been in the pipeline for several
years. Furthermore, the
suspension of the order gives the power back to the Provincial
Government to fast track the enactment of
the relevant legislation.
As set out in
Mazibuko,
an order such as the one proposed in
the present matter yields to, rather than encroach upon the
separation of powers.
[108]   Counsel
for Tsogo Sun in claiming that the postponement application was not
sustainable in law, also relied on
Ambabhungane Centre of
Investigative Journalism NPC and Another v Minister of Justice and
Correctional Services and Others
2020 (1) SA 90
(T) where the
court had to decide whether to grant the relief sought, namely a
(suspended) declaration of invalidity of the impugned
legislation, or
whether to dismiss the application. This issue overlaps with the
prematurity argument, as well as the preceding
separation of powers
contention.
[109]   Counsel
for the Provincial Government contended that seeing that in the
present matter, Tsogo Sun confirms its
agreement that any declaration
of invalidity the Court is moved to make, should be suspended by one
year to allow the Provincial
Government to finalise its legislation,
it accepts that the effect of that suspension will be that the
mandatory order it is seeking
in para 4 of its notice of motion
(namely that the Board consider and determine any application for
relocation which its subsidiaries
– the applicants – may
bring under section 41(2) of the WC Act) would be deferred pending
the outcome of the amendment
to the regulatory framework. According
to the Provincial Government, on this crucial respect the present
matter is entirely distinguishable
from
Amabhungane
, where the
applicant sought orders with immediate effect including interim
relief applicable during the suspension of invalidity.
Furthermore,
so goes the argument, in this way, the relief sought in
Amabhungane
had real consequences whilst by contrast, a hearing of the merits of
Tsogo Sun’s application at this juncture would achieve
very
little. For the reasons appearing hereunder, it is to my mind clear
that the
Amabhungane
judgment is very much analogous to the
facts of this matter.
[110]   The
Amabhungane
case involved a challenge to the constitutionality
of several provisions of the Regulation of Interception of
Communications and
Provision of Communication Related Information Act
70 of 2002 (RICA). The issues for determination therein were
three-fold, viz,
that (a) the application was premature –this
was premised on the fact that the State was already working on
adapting and
revising RICA, (b) the relief sought violated the
separation of powers between the judicial arm and other legislative
and executive
arms of the state – the State alleged that a
determination by the court of legislation with which the State was
allegedly
engaged in, would constitute judicial overreach, and (c)
the application raised issues in the abstract and for that reason
ought
not to be entertained – the issues were allegedly in the
abstract in that there was no factual basis laid for the attack on

RICA.
[111]
Relying on
Mazibuko,
supra
, the court in
Amabhungane
dismissed each of the points raised by the State and granted the
relief sought, to wit, a declaration of invalidity of the provisions

of RICA but suspended it to allow Parliament the space to cure the
defects identified. The following paragraphs from the
Amabhungane
judgment are apposite:
“
Is
the application premature?
[7]
The respondents’ is straightforward. The state is at work
adapting RICA; leave
it to get on with task.
[8]
First, it must be asked what the State is actually doing?
In
the answer given to Parliament by the Deputy Minister of Justice in
2017, vague remarks were made about consideration being given
to
amendments to RICA, which work would take about two years. That task
was apparently not thought to be urgent as the distraction
of the
2019 general election was alluded to as a reason why progress could
not be quicker. The hearing took place a month after
that event. When
prompted by me for an up to date account of progress, an affidavit by
Robbertze, a senior state law adviser, was
produced during the
hearing. He is the lead person in the revision of RICA. He states
that research of a comparative nature was
carried out. Apparently,
his team's recommendation is going to be that a new statute should
replace RICA rather than a series of
amendments; by implication this
must mean a significantly novel approach to the subject matter in
RICA. A first draft, it is said,
"could" be finalised by 31
August 2019 to be followed by extensive public consultation. Save as
mentioned, the affidavit
is scrupulously bereft of any hint of the
substance of such proposed legislation.
[9] It
was said that the Deputy Minister's parliamentary answers in 2017
addressed the issues and the terrain of at least some
of the
criticisms ventilated in the application and, so it is argued,
foreshadow consideration being given to the themes covered
in the
applicant's affidavits. Hence the exhortation to the court not to
duplicate the work.
[10] The
counter to this line of argument is that the State's efforts, in this
regard, do not matter to the application. No
sound reason exists, it
is argued, not to prosecute the application, even if the August 2019
deadline could be taken seriously.
Indeed, it is argued that the
ventilation of the issues raised in the application can do no less
than to inform the legislative
process and contribute to the open and
transparent debate over the value choices inherent in this type of
law-making.
[11] In
this regard, the authority in
Mazibuko
v Sisulu
2013
(6) SA 249
(CC)
at [70] is invoked to argue that the purported imminence of reforming
legislation could be no bar to the litigation.
In that case the Rules
of Parliament were at issue. The Constitutional Court held that the
courts have no discretion to withhold
a declaration of
unconstitutionality if presented with such a proven fact. The riposte
to the invocation of this decision was that
it is distinguishable on
the facts. So it is. However, the point of importance is not
similarity of the factual circumstances;
rather, the point is that
the Constitutional Court held that there can be no merit in delaying
a challenge to the inconsistency
of a statute with constitutional
norms on the ground that a repair job on the statute is
work-in-progress.
[12] Moreover,
given the spirited resistance to almost every contention advanced by
the applicant in criticising RICA, there
can be no expectation that
the reforming legislation, which we are told is being contemplated at
this time, is in the least benign
towards the criticisms advanced and
solutions offered to address the criticisms.
[13] In
my view, the argument of prematurity fails. If the provisions of RICA
fall foul of the Constitutional norms, this court
must pronounce on
such issues, not prevaricate.”
[112]
In the light of the aforegoing remarks, it is difficult to fathom the
Provincial Government’s contention
that the present matter is
entirely distinguishable from
Amabhungane
, in that in the
latter the applicant sought orders with immediate effect including
interim relief applicable during the suspension
of invalidity,
whereas a hearing of the merits of Tsogo Sun’s application on
the merits at this juncture would achieve very
little. This I say
because the order acquiesced to by Tsogo Sun is nothing out of the
ordinary when regard is had to the nature
of the relief sought in the
notice of motion. It is well to recall that in the
Amabhungane
matter, the court tailored the relief in line with each of the five
challenges, and given that declaration of constitutional invalidity

in respect of several sections of RICA, the remedy had to make
provision to cure the defects, pending the enactment of legislation,

and as such invoked the reading in of additional sections.  The
remedy sought in
casu
is straightforward and is incomparable
to the approach adopted by the Sutherland J, in RICA. In my view, the
distinction drawn
by the Provincial Government between the orders
granted in the
Amabhungane
judgment and the order sought in
the present proceedings is artificial and loses sight of the actual
reasons behind the orders
in
Amabhungane
. Furthermore, the
fact that Tsogo Sun agreed to the suspension of the determination of
its applicant’s application to the
Board for the relocation of
an outlying casino for a year does not diminish the substance of the
relief it sought in the notice
of motion, and neither does it justify
the postponement sought by the Provincial Government.  Instead,
the approach adopted
by Tsogo Sun is an inevitable corollary of
recognising the hallowed principle of separation of powers.
[113]
It remains to be said that the Provincial Government emphasised the
advanced stage of the Draft Twentieth and
Twenty-First Amendment
Bills which were published for comment in the Western Cape Provincial
Gazette on 8 May 2020, and the powers
that they give to the Board to
consider and determine relocation of outlying casinos. Whereas the
steps taken by the Provincial
Government appear to be at an advanced
stage, they do not, in my view warrant the postponement of the
determination of the Policy
Determinations adopted by the Executive
Council. The Constitutional Court in
Mazibuko
made it clear
that
there can be no merit in delaying a
challenge to the inconsistency of a statute with constitutional norms
on the ground that a
repair job on the statute is work-in-progress.
To this end, I align myself with remarks made by the court in
Amabhungane
.
Applying the same reasoning in respect of the impugned policy
decisions, it follows that the basis for the postponement sought
by
the Provincial Government is legally unsustainable.
[114]
With regard to the contentions made by the SISA respondents in
support of the Provincial Government’s application
for
postponement of these proceedings, for the reasons I have already
given in this judgment, they, in my view are equally unmeritorious.

In summary, I have held that the Provincial Government’s
application for postponement is based on shaky ground and cannot
be
said to be in the interests of justice. It follows that it must be
dismissed. I find no reason why the costs should not follow
the
result, and as such, the Provincial Government (the first and second
respondents) must pay costs jointly and severally.
Condonation
[115]   In the
notice of motion, Tsogo Sun sought an order granting the applicants
condonation for having failed to institute
an application for the
relief sought in accordance with the timeframes stipulated in section
7 of the Promotion of Administrative
Justice Act No.3 of 2000 (PAJA),
alternatively, within a reasonable time period, and granting the
Applicants leave to institute
the present proceedings. As I have
earlier pointed out, it is common cause that the present application
was brought 16 years after
the adoption of the impugned Policy.
According to Tsogo Sun, the need to bring the application arose only
after the Board had made
a pronouncement that it was not empowered to
consider the relocation of outlying casinos to the Cape Metropole.
[116]   It is
trite that condonation is an exercise of a true discretion by a
court, guided principally by the interests
of justice. In
Corruption
Watch NPC and others v President of the Republic of South Africa
2018 (1)0 BCLR 1179
(CC) at paragraph [64], citing
Brummer v
Gorfil Brothers Investments (Pty) Ltd
2000 (2) SA 387
CC held
that:
“
.
. . it is in the interests of justice that are paramount in
considering whether to grant condonation. On how the interests of

justice are determined it held:
‘
The
interests of justice must be determined by reference to all relevant
factors, including the nature of the relief sought, the
extent and
cause of the delay, the nature and cause of any other defect in
respect of which condonation is sought, the effect on
the
administration of justice, prejudice and reasonableness of the
applicant’s explanation for the delay or defect.”
[117]   What
must first be determined is whether PAJA applies to this matter.
Section 7(1) of PAJA provides that any proceedings
for judicial
review must be instituted without unreasonable delay and not more
than 180 days after the date on which an applicant
was informed of
the administrative action, became aware of the action and the reasons
for it, or might reasonably have been expected
to have become aware
of the action and the reasons. Tsogo Sun accepts that they have not
complied with the 180-days rule, thus
they seek condonation in terms
of section 9(1) of PAJA.
[118]   The
Provincial Government opposes the condonation application and laments
the fact that Tsogo Sun sought to review
and set aside a Policy that
has been in existence for more than 16 years, and from which it
(Tsogo Sun) had benefited. The SISA
respondents also oppose the
condonation application stating that Tsogo Sun has not made out a
case for the relief sought as it
has known of the Policy
Determinations since the time they were awarded the casino operator
licence several years ago.  They
reiterate that the Policy
Determinations were published in August 1997, 19 years before the
present application was launched, and
now nearly 23 years to the time
the application was heard. According to the SISA respondents, Tsogo
Sun has not provided an explanation
as why it delayed for such an
extraordinarily long period of time before applying to review the
Policy Determinations. Moreover,
Tsogo Sun’s desire to make
more profit by relocating one of their outlying casinos cannot
justify their failure to bring
the application timeously.
[119]   The
SISA respondents further contend that in the light of the recent
publication of the proposed amendment to
the legislative framework,
purportedly to facilitate the consideration of applications for
relocation of casino licences within
the Western Cape, it is not in
the interests of justice to grant condonation as the relief that may
be granted pursuant thereto
may become moot in the near future. This,
according to the contention is so when regard is had to the
unreasonableness of the explanation
given by Tsogo Sun. Besides, so
argue the SISA respondents, the relief sought by Tsogo Sun will only
apply in a future consideration
and decision by the Board of a
relocation application.
[120]   What
must first be determined is whether the delay in respect of which
Tsogo Sun seeks condonation is subject
to PAJA or common law. Tsogo
Sun, notwithstanding reliance on section 9(1) of PAJA in its
condonation application, contends, relying
on the decision of the
Supreme Court of appeal in
Bullock NO v Provincial Government,
North West Province and Another
2004 (5) SA 262
(SCA) para 7,
that the PAJA is not applicable to this matter as the Executive
Council adopted the Policy in 1997, before PAJA came
into effect in
2000. I do not understand the decision in
Bullock NO
, to be
setting down a general principle that PAJA is not applicable to
decisions made before it came into operation. Instead, at
paragraph
7, the court held that:
“
T
he
Act only came into operation on 29 November 2000 i.e. sixteen months
after the Premier’s decision had been taken. Accordingly,
any
rights which the appellants had to have that decision set aside have
to be sought in item 23(2)(b) of schedule 6 to the 1996
Constitution
had to be read as follows:
‘
Every
person has the right to ─
(a)
lawful administrative action where any of their rights or interests
is affected or threatened;
(b)
procedurally fair administrative action where any of their rights or
legitimate expectations is affected or threatened;
(c)
be furnished with reasons in writing for administrative action which
affects any of their rights or interests unless the reasons
for that
action have been made public; and
(d)
administrative action which is justifiable in relation to the reasons
given for it where any of their rights is affected or
threatened.’
In the light of the
aforegoing, the essential question should rather be whether the
adoption of the impugned Policy Determinations
amounts to
administrative action as contemplated in the Constitution. In order
to make this determination, it is necessary to have
regard to the
guiding principle set out in
Bullock NO
, supra:
“
[15]
A decision of an organ of State may relate to question of policy, and
the policy itself may not be open to judicial scrutiny:
SARFU
paras
[142] and [143];
Permanent
Secretary, Department of Education and Welfare, Eastern Cape and
Another v Ed-U-College (PE) (Section 21) Inc
2001
(2) SA 1
(CC) para [18].”
[121]
The matter at hand is concerned with Policy Determinations made by
the Executive Council. In
President of the Republic of South
Africa and Others v South African Rugby Football Union and Others
2000 (1)
(CC)
“
[142]
As we have seen, one of the constitutional responsibilities of the
President and cabinet members in the national sphere (and
premiers
and members of executive councils in the provincial sphere) is to
ensure the implementation of legislation. This responsibility
is an
administrative one, which is justiciable, and will ordinarily
constitute “administrative action” within the meaning
of
section 33. Cabinet members have other constitutional
responsibilities as well. In particular, they have constitutional
responsibilities
to develop policy and to initiate legislation.
Action taken in carrying out these responsibilities cannot be
construed as being
administrative action for the purposes of section
33. It follows that some acts of members of the executive, in both
the national
and provincial spheres of government will constitute
“administrative action” as contemplated by section 33,but
not
all acts by such members will do so.
[143]
Determining whether an action should be characterised as the
implementation of legislation or the formulation of policy may
be
difficult. It will, as we have said above, depend primarily upon the
nature of the power. A series of considerations may be
relevant to
deciding on which side of the line a particular action falls. The
source of the power, though not necessarily decisive,
is a relevant
factor.
10
[9]
So
too is the nature of the power, its subject matter, whether it
involves the exercise of a public duty, and how closely
it is related
on the one hand to policy matters, which are not administrative, and
on the other to the implementation of legislation,
which
is.
11
[0]
While
the subject matter of a power is not relevant to determine whether
constitutional review is appropriate, it is relevant
to determine
whether the exercise of the power constitutes administrative action
for the purposes of section 33. Difficult boundaries
may have to be
drawn in deciding what should and what should not be characterised as
administrative action for the purposes of
section 33. These will need
to be drawn carefully in the light of the provisions of the
Constitution and the overall constitutional
purpose of an efficient,
equitable and ethical public administration. This can best be done on
a case by case basis.”
[122]
In
casu,
the Executive Council is empowered by section 2(4) of
the WC Act to make policy determinations within the context of the
Act. What
is challenged are the policy determinations adopted by the
Executive Council pursuant thereto.  The issue of whether or not

section 7 of PAJA has not yet been decisively dealt with in our law,
but the general tenor seems to be that each case should be
decided on
its own facts. To this end, the Court in
Mostert v NO v Registrar
of Pension Funds
2018 (2) SA 53
SCA restated this vexed question
as follows:
“
[
8]
A word of caution may not be out of place.
New
Clicks
is
no authority for the proposition that the making of regulations by a
minister, in general, is administrative action for
purposes of PAJA.
It seems, with respect, that the statements in some of the other
judgments in that case, to the effect that this
is what Chaskalson CJ
held, were based on a misinterpretation of what he said. The learned
Chief Justice said what is or is not
administrative action for the
purposes of PAJA is determined by the definition in section 1.
[1]
He
analysed the regulations in question
[2]
in
the light of the definition, concluded that legislative
administrative action has not been excluded from the definition
of
administrative action, and said:
‘
It
follows that the making of the regulations
in
the present
case
by
the Minister on the recommendation of the Pricing Committee was “a
decision of an administrative nature”. The regulations
were
made “under an empowering provision”. They had a “direct,
external legal effect“ and they “adversely”

affected the rights of pharmacists and persons in the pharmaceutical
industry. They accordingly constitute administrative action
within
the meaning of PAJA’. (My emphasis).
[9]
In a separate judgment Ngcobo J expressed the view that PAJA applied
to the specific power to make regulations conferred by
s 22G
(2)(a)-(c) of the Medicines and Related Substances Act 101 of 1965
(Medicines Act). He emphasised that he refrained from
deciding
whether PAJA is applicable to regulation-making in general. Two of
the judges in that matter expressed their agreement
with this
approach while Sachs J held that PAJA was not applicable, save in the
specific respect of fixing the precise amount chargeable
as a
dispensing fee. Moseneke J held that it was unnecessary to decide
whether PAJA applied to ministerial regulation-making, and
four
judges concurred in his judgment.
[10]
In dealing with the applicability of PAJA to regulation-making
Chaskalson CJ was therefore not speaking for the majority of
the
court, and, as I have tried to show, in any event confined himself in
this regard to the specific regulations that the court
was dealing
with. It seems, with respect, that in
City
of Tshwane Metropolitan Municipality v Cable City (Pty) Ltd
2010
(3) SA 589
(SCA)
the position was also stated too widely (para 10). The final word on
regulation-making and the applicability of PAJA to it
may therefore
not have been spoken. And as this matter shows, not all the
provisions of PAJA, and particularly s 7, are tailored
for the review
of a regulation.”
[123]
In this matter, the source and nature of the power of the Executive
Council, although closely related to
the
implementation of legislation, cannot, in my view be characterised as
administrative action as envisaged in section 33 of the
Constitution.
Having found that the adoption of
the Policy Determinations cannot be construed as constituting
administrative action, it follows
that the delay rule applicable is
that of common law. Tsogo Sun contended that in the pre-PAJA era, the
delay rule did not apply
to subordinate legislation and in this
matter the court should be slow to non-suit the applicants based
solely on the delay in
launching this application. Besides, the issue
of whether or not the Board is empowered to consider and pronounce
upon applications
for relocations of outlying casinos became clear
when the Board expressed that it did not have the powers to make that
determination.
The explanation given by Tsogo Sun for the delay
cannot be gainsaid. If the Board expressed for the first time that it
viewed itself
as being hamstrung by the Policy determination’s
from considering relocation of outlying casinos to the Cape Metropole
when
Tsogo Sun made the enquiry, it must be accepted that that is
when the knowledge came to Tsogo Sun. Tsogo Sun states that it became

necessary to bring the application after the pronouncement by the
Board of its lack of powers, which it did. I am persuaded that

granting the applicants condonation is in the interests of justice
for the following reasons:
123.1
It is not only desirable, it is imperative that the status of the
policy determinations made by the Executive Council
be determined
because the Board continues to act in terms of the Policy, and
refuses to consider an amendment which violates the
exclusivity
regime specified in it. Put differently, the legality or illegality
of the policy determinations relating to geographical
exclusivity, as
I have earlier determined in this judgment, remain in force;
123.2
The applicant in
Akani
challenged a policy determination which
was invalid for precisely the same reason as the determinations
impugned in the current
proceedings.
123.3
The nature of the relief sought by Tsogo Sun is such that it will not
affect any of the past decisions made by the Board
acting under the
Policy.
123.4
The non-suiting of Tsogo Sun would in essence allow a casino operator
to enjoy geographical exclusivity which may have
been created in
violation of the WC Act, perhaps perpetually.
[124]
It remains to be said that although it must be accepted that the
Tsogo Sun applicants had always known about the
Policy as there was
litigation and legislation dealing with the very issue for several
years, it chose to test when it sought to
exercise its rights in
terms of section 41(2), and was rebuffed in that attempt, in my view,
there are compelling reasons why the
delay, in the interests of
justice, should be condoned. It is my judgment that the applicants’
delay in launching these proceedings
is condoned.
[125]
Having dealt with the preliminary issues, namely, the condonation and
postponement applications, I revert to the
main application.
Issues for
determination on the merits of this application
[126]   As
discernible from the factual background, the issues that must be
determined revolve around whether paragraphs
1.1(b) to (d) of the
Policy are
ultra vires
. They can be summarized thus:
(a)
Are the policy determinations imposed by the Executive Council
contained in paragraph 1.1(b)
to (d) of its Policy unlawful and
invalid?
(b)
Does the Board have the powers to consider the relocation of outlying
casinos to the Cape
Metropole.
(c)
did the Provincial Cabinet usurp powers accorded to the Board?
(d) did the Provincial
Cabinet usurp the Minister’s regulation-making powers?
Analysis
[127]   In
order to fully comprehend the determination of the aforegoing issues,
it is necessary to re-encapsulate the
merits of this application.
Tsogo Sun asks the court to declare that clauses 1.1 (b) to (d) of
the Policy are
ultra vires
, invalid and of no force and effect
and specifically requests the court to:
127.1  declare that
the Board is competent to consider and determine an application under
section 41(2) of the WC Act for a
casino operator’s licence to
be amended so as to permit the holder to perform its licences
activities from the Cape Metropole;
and
127.2  after issuing
the declaratory as envisaged above, direct the Board to consider and
determine an application by either
one of the first to third
applicants which currently hold licences to operate casinos in
outlying areas to relocate one such casino
to the Cape Metropole.
[128]   To
recap, clause1.1 (b) of the Policy provides that the five casino
licences allocated to the Western Cape shall
be distributed, one in
each of the five regions, (c) that the aforesaid licence shall be
exclusive for a period of 10 years and
(d) the exclusivity zone for
the Cape Metropole casino, in relation to other casinos, shall have a
75-meter radius, calculated
from the Cape Town City Hall. In short,
there are two different types of exclusivity contained in the Policy
regime:
128.1  First there
is a temporal exclusivity (contained in paragraph (c); and
128.2  Second, the
geographic exclusivity in respect of each region (paragraph (b)
stipulates that there may only be one casino
issued for each region
whereas (d) singles out the Cape Metropole as a special case by
prescribing its geographic territory of
exclusivity.
It is common cause that
the temporal exclusivity has expired for each licence. The issue
relating to clauses 1.1(c) and (d) of the
Policy, as correctly argued
by the Provincial Government are due to the effluxion of time, moot.
It follows that they are no longer
operative and therefore do not
bind the Board in any way.  However, the geographic exclusivity
in clause 1.1 (b) continues
to apply. This much is clear from the
Board’s view that it cannot exercise its powers to amend a
licence in a manner which
is at odds with the Policy, with the result
that it was precluded from allowing a second casino to operate in the
Cape Metropole.
The Board specifically stated that:
“
It
would breach the policy determinations, (that one casino licence be
issued in each of the five regions demarked for the Western
Cape.”
Besides the Board’s
attitude, the Provincial Government acknowledges in the postponement
application affidavit that the issue
clause 1.1 (b) has not been
affected by the effluxion of time. The
ultra vires
challenge
therefore specifically relates to clause 1.1 (b).
[129]   Tsogo
Sun contends that first, the policy determinations of geographic
exclusivity relating to “
size, nature and implementation of
the industry”
, are in excess of the authority of the
Executive Council. Second, they unduly fetter various powers granted
to the Board by the
WC Act. Third, they impermissibly usurp the
regulation-making powers vested to the Minister by section 81, and
that there can be
no substantial compliance with the requirements as
alleged by the Provincial Government. In addition, by treating the
Cape Metropole
as a special case by prescribing its geographical zone
of exclusivity while leaving the determination for the other casinos
to
the Board is irrational. Below, I deal with each of the three
contentions.
Does the Executive
Council have the powers to make the impugned policy determinations?
[130]   In
order to determine the extent of the Executive Council’s
policy-making powers it is necessary to first
have regard to the
specific powers granted to the Board to regulate gambling, and then
examine the specific authority given to
the Minister. As correctly
argued on behalf of Tsogo Sun by Mr Budlender SC, to interpret the
Executive Council’s policymaking
powers without first having
regard to the specific powers vested in the Board and the Minister,
would be get things the wrong way,
around as borne out by a
contextual reading of the framework of the WC Act and the
Akani
judgment. This approach is in line with the judgment in
City of
Johannesburg Municipality v Gauteng Development Tribunal
2010 (2)
SA 554
SCA at 562 where Nugent JA, in dealing with the delineation of
powers of the national and provincial government said the following:
“
[35]
The construction that was adopted by the court below and by Rabie J,
and that was advanced before us by counsel
for the respondent, all
proceed by inferential reasoning from the proposition that the
functions with which we are now concerned
are embraced by the concept
of ‘development,’ a functional area that falls within the
concurrent  legislative
authority of national and provincial
government, and thus by inference fall to be excluded from the
functional area ‘municipal
planning’. That line of
reasoning seems to me to approach the matter the wrong way round,
[36]
It is to be expected that the powers that are vested in government at
national level will be
described in the broadest of terms, that the
powers that are vested in provincial government will be expressed in
narrower terms,
and that the powers that are vested in municipalities
will be expressed in the narrowest terms of all. To reason
inferentially
with the broader expression as the starting point is
bound to denude the narrow expression of any meaning and by so doing
to invert
the clear constitutional intention of devolving power on
local government.”
[131]   Before
I examine the powers of the Board in terms of the WC Act, I remind
myself of the court’s approach
to statutory interpretation as
restated by Majiedt AJ (as he then was)in
Cool Ideas 1186
v
Hubbard and Another
2014 (4)
(3 SA 474:
“
[28] A
fundamental tenet of statutory interpretation is that the words in a
statute must be given their ordinary grammatical
meaning, unless to
do so would result in an absurdity.
There
are three important interrelated riders to this general principle,
namely:
(a) that
statutory provisions should always be interpreted purposively;
(b) the
relevant statutory provision must be properly contextualised; and
(c) all
statutes must be construed consistently with the Constitution, that
is, where reasonably possible, legislative provisions
ought to be
interpreted to preserve their constitutional validity.  This
proviso to the general principle is closely related
to the purposive
approach referred to in (a
).
(footnotes omitted)
(See
also
Democratic Alliance v Speaker of the National Assembly and
Others
2016 (3) SA 467
(CC)).
[132]
Section 2(4) of the WC Act sets out that the main object of the Board
shall be to control gambling, racing and
activities incidental
thereto in the Province, subject to this Act and any Policy
determinations of the Executive Council relating
to the size, nature
and implementation of the industry. Section 2(6) provides that any
policy determination of the Executive Council
in terms of subsection
(4) shall be published in the Provincial Gazette for general
information. This was done in the present matter.
[133]
Crucially, section 2 (5) provides that the Board shall have all
powers that are necessary to achieve its main
object and perform its
functions under the Act, including the powers in section 12. More
relevantly, section 12(3) provides that
the Board shall have the
powers to grant, amend, refuse, transfer, suspend or revoke licences
under this Act, whilst section 12(4)
sets out the Board’s
powers to impose, amend, suspend, or revoke conditions in respect of
any licence at any time. Section
35(3) provides that the Board shall
not approve an application for a casino licence where:
133.1 The premises are
not or will not be suitable for the purpose for which they will be
used under the licence;
133.2 the development is
undesirable within the specific geographical environment with
reference to social, religious, educational,
cultural, economic,
environmental, transport and land use aspects;
133.3 the granting of the
licence is against the public interest and not in accordance with the
objectives of the Act;
133.4 if in the Board’s
opinion, the possibility exists that the granting of the application
may cause a monopolistic situation
to arise is aggravated;
[134]   Section
44A empowers the Board to grant “a licence in an area and for a
period as determined by the Board.”
Of note, is that the
section 82(1) empowers the Board to make rules relating to the
exercise of its powers and the performance
of its functions,
including “
any matter pertaining to an application for a
licence”
(section 82(1)(a);
any matter which in terms of
this Act, is required or permitted to be determined
”
(section 82(1)(f); and “
in general, any matter in respect of
which it is necessary or expedient to make rules in order to achieve
the objects of this Act”
(section 82 (1) (g).
[135]   It was
contended on behalf of Tsogo Sun that the impugned paragraph of the
Executive Policy went beyond matters
in respect of which it was
entitled to make policy in terms of section 2 (4) of the WC Act in
relation to the size, nature, and
implementation of the industry.
According to this contention, whereas, generally, the Board is
empowered control all gambling activities
in the province subject to
the policy determinations, this does not mean that the Executive
Council has the authority to make policy
determinations on any matter
whatsoever. This is so, continues the contention, because most of the
Board’s discretionary
powers must be exercised in accordance
with “this Act”. Section 1 defines “this Act”
to include only “the
Schedules and any regulation or rule made
or issued thereunder” and the policy determinations adopted by
the Executive Council
in section 2(4) and 2(6) are explicitly no
included in the definition.  For this reason, the provisions
relating to Executive
Council’s policy-making authority must be
restrictively interpreted such that the aforesaid authority does not
extend to
those instances where the Western Cape Act has conferred
specific discretionary powers on the Board in terms of “this
Act”.
of the Western Cape Act specifically provides that they
must be exercised in accordance with “
this Act”.
According to Tsogo Sun, the effect of a broader interpretation would
fetter on the Board’s discretionary powers and functions.
[136]   The
Provincial Government retorts by stating that there is a neither
textual nor other cause for such restrictive
interpretation, the
consequence of which would render the power granted to the Executive
Council nugatory. Mr Breitenbach SC emphasised
on behalf of the
Provincial Government that sections 2(4) and 2(5) of the WC Act
together make the Board’s powers to regulate
the gambling
industry subject to Cabinet’s policy determinations relating to
‘
size, nature and implementation of the industry’
.
[137]
The aforegoing summary of the statutory powers of the Board amply
demonstrates that it is fully empowered to grant a
licence holder
exclusivity to operate a casino within a specific area and period as
may be determined by it. It therefore is plain
that the geographic
exclusivity regime created by clause 1.1(b) of the Policy breaches
the careful allocation of powers to the
Board by the WC Act as it
effectively usurps the Board’s powers to make a determination
in terms of section 44A. This is
impermissible. as the Executive
Council’s role in issuing policy determinations is subsidiary
to the primary authority of
the Board to regulate and control
gambling in the Western Cape. This is particularly so because policy
determinations relating
to the “
size
and nature if the industry”
may
not override, amend or be in conflict with the WC Act. This includes
the Board’s power and discretion to grant licences
and
determine the conditions of licences in terms of section 2(3) and
(4), 37and 42 of the WC Cape Act. The Executive Council lacked
the
necessary
vires
to
adopt the Policy. Besides when regard is had to the old section 41
which makes it plain the transfer of any licence to any other

premises was prohibited, it becomes clear that the current section
41(1) prohibits transferring “premises licence”
not a
“casino licence”.
Section
41(2) therefore makes it clear that where a licensee wishes to change
premises, it must apply to the Board for the amendment
of the
licence. The licence can therefore be amended to change premises.
What clause 1.1(b) of the Policy does, is to take away
the power and
discretion of the Board to give effect to section 41(2).  Clause
1.1(b) is also in breach of the principles
laid down by the Supreme
Court of Appeal in
Akan
i.
[138]   In
Akani
, the Court dealt with the limit of the Executive
Council’ policy making powers under the WC Act. The relevant
facts are briefly
that the appellant,
Akani,
and the
respondent, Pinnacle Point, had both applied the Board (Southern Cape
Region) for the award of a casino licence in terms
of the Western
Cape Act. After considering the applications, the Board selected
Pinnacle Point as the successful applicant. However,
the Board later
disqualified Pinnacle Point because it had failed to obtain the
requisite financial guarantee from a financial
institution. The
financial guarantee requirement had been specified in the Executive
Council’s Policy. The Board considered
itself bound by the
Policy because of section 2(4) of the Act. Pinnacle Point challenged
the Board’s decision to disqualify
it on the basis that the
policy determination was beyond the Executive Council’s powers.
The Court pointed out that:
“
laws,
regulations and rules are legislative instruments, whereas policy
determinations are not. As a matter of sound government,
in order to
bind the public, policy should normally be reflected in such
instruments. Policy determinations cannot override, amend
or be in
conflict with laws (including subordinate legislation). Otherwise the
separation between Legislature and Executive will
disappear.”
With regard to the
Board’s powers, the Court commented thus:
“
[5]
The provincial Act established the boar (s2(1)) and provides that the
right to carry on
any gambling within the Province vests exclusively
in the board (ss(2)). This provision is made subject to ss(4), which
states
that the main objective of the board is to control gambling
activities. . .
The
board is then granted all powers necessary to achieve its main
objective and perform its function under ‘this Law”
(ss
(5)).
In addition, the Court
said that:
“
One
thing, however, is clear: policy determinations cannot override the
terms of the Provincial Act for the reasons already given.
Where, for
instance the provincial Act entrusts the minister with the
responsibility of determining the maximum permissible number
of
licences of any particular kind that may be granted in a particular
area (s81 (1) (d)), the cabinet cannot regulate the matter
by means
of a policy, something it did. Likewise, where s 37 (1)(l) empowers
the board to impose conditions relating to the duration
of licences,
the cabinet cannot prescribe to the board by way of a policy
determination that, for instance, casino licences shall
be for a
period of ten years, something it did. In other words, the cabinet
cannot take away with one hand that which the lawgiver
has given with
another.
The court further held
that the policy determination in issue imposed an absolute obligation
on applicants for licences to lodge
circumscribed guarantees before
the grant of the licence:
“
emasculates
the board to the extent that it will never be able to exercise its
powers and discretion under s 37(1)(j) to require
guarantees from
someone other than a bank or other financial institution would be
acceptable is no longer that of the board and
also relating to the
time limits and extensions of time. In other words, by an executive
act, a legislative act was amended, diluted
or undone. This was done
beyond the powers of the cabinet.
[139]
In the light of the aforegoing, it is my judgment that an
interpretation that resonates with the purpose of the
WC Act is that
the adoption of clause 1.1(b) of the Policy overrides the terms of
the Act
.
Furthermore, the clause fetters the Board’s
discretion to act in accordance with the powers accorded to it by the
WC Act.
It follows that on the aforegoing basis, the exclusivity
regime imposed by the Executive Council in paragraph 1.1(b) the
Policy
is unlawful and invalid.
[140]
Notwithstanding the preceding findings, I must still consider the
argument raised by the Provincial Government
that section 2(4) must
not be restrictively interpreted in the context of the interpretation
of the word ‘
implementation’.
The issues of
interpretation somewhat overlap. The proper context for this
contention as can be discerned the Provincial Government’s

answering affidavit is that when regard is had to the dictionary
meaning of the word ‘
implementation’
the
Provincial Cabinet’s power provided for in 2(4) is accordingly
to determine the manner in which its plan for the gambling
industry
is executed, as well as to determine the nature and size of the
gambling industry. According to this contention, the Provincial

Cabinet’s power provided for in 2(4) is accordingly to
determine the manner in which its plan for the gambling industry is

executed, as well as to determine the nature and size of the gambling
industry. Furthermore, so goes the contention, Clause 1.1(b)
provides
that the regional distribution of casinos in the Western Cape is ‘
in
order to stimulate and encourage development throughout the Province,
inter alia by the empowerment of local disadvantaged groups
through
both employment and equity ownership’.
The stated purpose
of clause 1.1 (b) is therefore that it should be a vehicle for
economic upliftment in underdeveloped areas of
the Province. In this
way, clause 1.1(b) directly contributes to the realisation of the
developmental aims which Cabinet adopted
on 13 September 1995
(referred to in para 12 above). Moreover, though the regional
distribution of casinos, as well as the limitation
of the number of
casinos in well-resourced areas such as the Cape Metropole, clause
1.1(b) limits competition between casino operators
and limits access
to the lucrative Cape Metropole. In this way, clause 1.1(b) also
determines the size of the industry, collectively
and in each of the
regions, as well as the protected nature of the industry. The
Provincial Government further contends that Clauses
1.1(c) and (d),
on the other hand, protected the economic interests of casino license
operators through a ten-year exclusively
regime envisaged by section
44A of the WC Act. During its operation, the exclusively regime
effectively protected casino operators
from regulatory changes that
would amend the regional distribution of casinos put in place by
clause 1.1(b). In this way, clauses
1.1(c) and (d) similarly had a
direct impact on the implementation of the industry, as well as its
nature.
[141]   Sun
International, like the Provincial Government, contends that the
Board’s exercise of its discretionary
powers and performance of
its functions is subject to the Cabinet’s Policy. According to
the argument, “
section 2(4) provides that the Board may not
exercise a power that it might otherwise have exercised if the
Executive Council has
made a policy determination relating to that
matter. Since the inability of the Board to exercise such power is
contemplated by
section 2(4) of the Act, the existence of a policy
determination does not produce an outcome that is inconsistent with
the Act.”
Furthermore, so goes the contention, if the
applicants’ complaint is that the section may not permissibly
authorise the Executive
Council to make a policy directive depriving
the Board of a power that it had under the WC Act, then the
applicants were required
to challenge the legality of section 2(4).
[142]   I have
already indicated that the Executive Council’s policy making
powers may not fetter the Board’s
exercise of its statutory
authority. In my judgment, it is not necessary for the applicants to
challenge the legality of section
2 (4). This is so because, properly
construed, the WC Act specifically demarcates powers in terms of
section 12 which are to be
exercised under “this Act”,
and this does not include policy determinations. Furthermore, the
Court in
Akani
emphasised that the Executive Council’s
powers to make policy are not unlimited, for:
“
[W]
section 37 (1) (l) empowers the board to impose conditions relating
the duration of licences, the cabinet cannot prescribe to
the board
by way of a policy determination that, for instance, casino licences
shall be for a period of ten years, something else
it did.”
The
above remarks are equally applicable to the circumstances of this
matter in relation to the exclusivity imposed by the Executive

Council. It would be remiss to interpret the provisions of section
2(4) as giving the Executive Council powers to regulate any
matter
relating to gambling in the province, without having regard to the
powers afforded to other role players. It is also well
to recall that
in
Akani
,
the Court reaffirmed the constitutional principle of separation of
power between the executive and the legislature, and a contextual

interpretation of statutes.
[143]   Tsogo
Sun argues that the above interpretation proffered by the Provincial
Government is inconsistent with the
National Act. This necessitates
an examination of the relevant provisions of the National Act
[144]   Section
53 of the National Act provides that:
146.1  when
considering an application for a licence, the Board must consider the
socio-economic impact of the proposed licence
on the community and
may impose justifiable conditions on the licence to address this
issue (s53(1)(b) and (c); and
146.2  on an annual
basis, the Board may impose further or different reasonable and
justifiable conditions to the extent necessary
to address this issue
(s 53 (2) (b).
[145]   In
addition, in terms of section 54:
147.1  when
considering an application for a casino licence, the Board must
determine whether approving the application is
likely to
substantially affect competition in the gambling industry generally,
or in respect of the proposed activity within the
Province (s 54 (1)
(a); and
147.2  the Board
must refuse the application unless there are overriding public
interest reasons for approving it, if it appears
that the approving
the application would result in the applicant, alone or in
conjunction with a related person, achieving market
power (s 54 (2).
[146]   The
above provisions affirm that the National Act contemplates that the
Board has the discretionary power to consider
the following factors:
(a)
the potential socio-economic impact on a community;
(b)
issues of competition.
The upshot of this is
that the Executive Council’s exclusivity regime fetters the
Board’s powers as I have already determined.
Furthermore, the
dictionary interpretation approach of the word ‘
implementation’
,
adopted by the Provincial Council, lacks the proper context of the
structure created by the WC Act and the National Act, and primarily

focuses on the outcomes that may accord with a particular executive
objective.  Besides, based on
Akani
, policy
determinations rank below the Act, ministerial regulations, and the
Board’s rules within the legislative framework.
[147]   As
correctly argued by counsel for Tsogo Sun, the Provincial
Government’s argument that paragraph 1.1 (b)
of the Policy
determines the size of the industry “
collectively, and in
each of the regions, as well as the protected nature of the
industr
y”, by prescribing the regional distribution of
casinos and the limitation of casinos in well-resourced areas such as
the
Cape Metropole, is erroneous. This is so because the maximum
“size of the industry” – that is five casinos –

has been predetermined for the Western Cape by the Minister in terms
of the National Act. While section 2(4) possibly empowers
the
Executive Council to make a policy determination which reduces that
number, the provision does to give it authority to determine
the size
of the casino in specific areas in the Western Cape.
Did the Executive
Council usurp the Minister’ powers?
[148] The question that
must be answered under this heading is whether the Executive Council,
by enacting clause 1.1(b) usurped
the Minister’s
regulation-making powers.
[149]   Tsogo
Sun contends, as set out in its founding affidavit that a further
reason why the policy determinations are
ultra vires
the WC
Act is that the Executive Council has purported to exercise functions
vested in the Minister by section 81(1) (d) and (f).
This section
empowers the Minister to make regulations in respect of the number of
licence that may be granted in a particular
area as well as the
granting of exclusive rights to the holder of a casino operating
licence for any period and in respect of any
area. In line with this
contention, if a maximum number is to be determined per region basis,
that must be addressed in ministerial
regulations for it to be
considered in the Board’s exercise of statutory power to invite
and determine applications for casino
licences.
[150]   It is
undisputed that the Minister did not make any regulations. Instead,
the Executive Council, through the impugned
Policy purported to do
so. According to Tsogo Sun, this is impermissible.
[151]   Sun
International, retorting to Tsogo Sun’s argument, contends
that   the WC Act empowers both
the Executive Council and
the Minister to deal with these issues in regulations and policy
determinations, respectively. This argument
is based on the same
premise advanced earlier on, to the effect that section 2(4) of the
Act must be interpreted as empowering
the Executive Council to
regulate any matter relating to gambling in the province, without
regard to specific powers granted to
other actors by the Act, and
that in the absence of a challenge to the provision, it must be
assumed lawful.
[152]   The
Provincial Government concedes that the Policy determinations ought
to have been included in Ministerial regulations
but argues that this
matters not because the Policy was introduced by the Premier, who was
responsible for the administration of
the WC Act at the time –
in short, there was a “
a manner and form problem
”
with regards to clause 1.1(b).  Counsel for the Provincial
Government during argument further conceded that, if the
approach in
paragraph 7 of
Akani
is followed, clause 1.1 (b) of the Policy
was not lawfully enacted. Notwithstanding the concessions, Counsel
for the Provincial
Government argued that there had been substantial
compliance with the requirements of section 81 of the WC Act and that
Akani
had been overtaken by more recent decisions.
[153]   The
contentions advanced by both the Provincial Government and Sun
International are, for reasons appearing hereunder,
unsustainable.
[154]   First,
‘manner and form’ are formal requirements that must be
met in order for the public power to
be validly exercised.
In
Doctors for Life v Speaker of the National Assembly
[2006] ZACC 11
;
2006 (6) SA
416
(CC) at paragraph 208 in the context of a challenge to
legislation, the Court held thus:
“
It
is trite that legislation must conform to the Constitution in terms
of both its content and manner in which it was adopted. Failure
to
comply with manner and form requirements in enacting legislation
renders the legislation invalid. And courts have power to declare

such legislation invalid.”
In
Minister of Justice
v Harris
2001 (4) SA 1297
(CC) a para 18 the Court held thus:
“
What
is clear is that they consciously opted to locate the notice in the
framework of section 3(4) of the National Policy Act. The
result is
that it is not now open to the Minister to rely on section 5(4) of te
Schools Act to validate what was invalidly done
under section 3(4).
The otherwise invalid notice issued under the National Policy Act can
therefore not be rescued by reference
to powers which the Minister
might possibly have had but have failed to exercise under the Schools
Act.”
Likewise,
in
Liebenberg NO v Bergrivier
Municipality & Others
2013 (5) SA
246
(CC) at paragraph 44, Jafta J, in his minority judgment (but
without disagreement from the majority judgment on this principle)

held that:
“
In
our law, administrative functions performed in terms of incorrect
provisions are invalid, even if the functionary is empowered
to
perform the function concerned by another provision. In accordance
with this principle, where a functionary deliberately chooses
a
provision in terms of which it performs an administrative function
and it turns out that the chosen provision does not provide

authority, the function cannot be saved from invalidity by the
existence of authority in a different provision.”
The above restatement of
the law was relied upon in the unanimous Supreme Court of Appeal
decision in
Zuma v Democratic Alliance and Others; Acting National
Director of Public Prosecutions and Another v Democratic Alliance and
Another
2018 (1) SA 200
at paragraph 58 when it stated that “
the
Constitutional Court was equally emphatic concerning the invocation
and reliance on a statutory power that was inapposite
”.
[155]   I now
turn to determine the proper interpretation of section 81 in the
light of the competing contentions.
[156]   Section
81 of the WC Act states that the power to make regulations is vested
in “
the responsible member”
who is defined as “
the
member of the Executive Council responsible for the administration of
this Act”
. In addition, in terms of section 81, the Policy
determinations ought to be made by way of a regulation and not a
policy determination.
That much is clear from the aforesaid
provisions, and any interpretation suggesting otherwise would be
incongruent with the WC
Act. As restated in
Akani,
regulations
and policies are different legal instruments and policy is subject to
the regulations. It therefore is plain that the
regulation-making
power cannot be exercised by anyone else, be it an individual or a
body of which the member is a part, and even
if he or she agrees with
the decision. Furthermore, the decisions referred to above amply
demonstrate that a decision under a wrong
section is unlawful.
Furthermore, there is no indication that the Provincial Legislature
intended to give the Executive Council
the power to regulate these
issues by way of Policy. In any event, for a power to have been
lawfully exercised, it must be exercised
by the right actor, using
the correct mechanism. It follows that a claim of substantial
compliance must, as a fundamental consequence
of the law be founded
on the basic requirements for the exercise of that power having been
met. In this case, they have not been
met.
[157]   In so
far as Sun International’s argument to the effect that section
2(4) of the Act must be interpreted
as empowering the Executive
Council to regulate any matter relating to gambling in the province
without regard to specific powers
granted to other role players, I
have already considered and found why such an approach is untenable
when regard is had to the
Akani
judgment. The suggested
approach is also not constitutionally compliant as the Executive
Council may not exercise its subsidiary
policy-making power in a
manner which usurps the regulation-making powers of the Minister.
[158]   Second,
the Provincial Government suggests that the fact that the Policy was
brought into existence in a manner
which is similar to how
regulations are promulgated raises its status to that of a
regulation. For reasons I have already alluded
to, it plainly does
not.
[159]   It
remains to be said that the Provincial Government suggested that the
Akani
judgment has been overtaken by more recent
jurisprudence. No specific reference was made to any case.  In
fact, in
Ahmed v Minister of Home Affairs
2019 (1) SA (CC) at
paragraph 38, the Constitutional Court cited it in support of the
following reasoning:
“
If
the Directive overrides, amends or conflict with the provisions
and/or scheme of the Immigration Act, then it is unlawful. Similarly,

the Directive may not be in conflict or inconsistent with the
Constitution. The making of a directive is the exercise of public

power, and all public power must be exercised lawfully. The
Director-General of the Department can only make directives that fall

within the four corners of the empowering legislation (in this case,
the Immigration Act). For the Director-General to issue a
directive
that contradicts or extends beyond the powers given to him by the
Immigration Act would be to act without legal authority
and violate
the rule of law.”
[2]
As can be deduced from
the aforegoing, clause 1.1(b) of the Policy is undoubtedly
ultra
vires
and must be so declared.
[160]
The above finding is dispositive of the matter. However, in the light
of the fact that the issue of substantive
irrationality of on the 75
km limit in clause 1.1(d) was raised, notwithstanding the declaration
of mootness I have made, for the
sake of completeness, and
considering that I may be wrong in making the aforesaid finding, I
turn to consider Tsogo Sun’s
contention that treating the Cape
Metropole differently is irrational.
Was treating the Cape
Metropole as a special case irrational
?
[161]   It will
be recalled that paragraph 1.1 (d) of the Policy provides that the
Cape Metropole’s exclusivity
zone is 75 kilometers radius,
while paragraph 1.1 (e) provides that the exclusivity zone of “
other
casinos shall be determined by the Board”
. Tsogo Sun
further contends that the Provincial Government has not proffered any
objective basis for the distinction made in the
policy.
[165]
Rationality is explained in
Minister of Home Affairs v Scalabrini
Centre Cape Town and Others
2013 (6) SCA 421 thus:
“
[65]
But an enquiry into rationality can be a slippery path that might
easily take one to inadvertently into assessing
whether the decision
was one the court considers reasonable. As appears from the above,
rationality entails that the decision is
founded upon reason –
in contradistinction to one that is arbitrary – which is
different to whether it was reasonably
made. All that is required is
a rational connection between the power being exercised and the
decision, and a finding of objective
irrationality will be rare.”
[162]   The
Provincial Government argues that it was reasonable for it to
determine the exclusivity zone for the Cape
Metropole and leave the
rest to the Board for the following reasons:
166.1  Gambling in
the Western Cape was to be phased in gradually, beginning with the
Cape Metropole as the best resourced
region, and then proceeding to
the other regions which needed development. To illustrate this
reason, the Provincial Government
points out that the casino licence
in respect of Worcester was granted seven years after the Policy was
adopted.
166.2  The Board had
material input into the determination of the Cape Metropole
exclusivity. To this end, the Provincial Government
attached comments
received from the Board.
[163]   Tsogo
Sun scoffs at both reasons stating that they are not supported by the
evidence on which the Provincial Government
relies for the
distinction. Regarding the first reason, it contends that besides the
casino operator licence issued in respect
of the Worcester casino,
other licences were issued in close proximity to the licence issued
for the Cape Metropole: the Caledon
licence was issued five months
later; and the Myknos licence was issued ten months later,
furthermore, both casinos began operating
before Grandwest casino in
the Cape Metropole did. Tsogo Sun argues that the Provincial
Government has provided absolutely no explanation
for the
determination of exclusivity zone to the Board in respect of other
casinos which were brought into operation contemporaneously
with the
Cape Metropole. For this reason, concludes, Tsogo Sun the facts
before court do not support the gambling was to be phased
in. As to
the second reason advanced by the Provincial Government, Tsogo Sun
states that the comments received from the Board attached
to the
Provincial Government’s answering affidavit reveal that even
before the Board was given an opportunity to provide
input, the
Executive Council had already decided to treat the geographic
exclusivity in the Cape Metropole differently from other
casinos.
Furthermore, while the Executive Council took the Boards comments
into consideration into account in respect of certain
details, the
Board made no comment on the issue why the Cape Metropole was to be
treated differently. Moreover, the Board, contrary
to the Provincial
Government’s contention had no ‘material input’
into the Executive Council’s decision
to make a distinction
between the Cape Metropole and the other casinos.
[164]   It
indeed is, as contended by Tsogo Sun so that the Provincial
Government has provided absolutely no explanation
for the
determination of exclusivity zone to the Board in respect of other
casinos which were brought into operation contemporaneously
with the
Cape Metropole. There are no objective facts supporting the
contention that there was to be a gradual phasing in the light
of the
evidence to the effect that the Myknos and Caledon casinos began
operating at the same time as the GrandWest casino in the
Cape
Metropole. It therefore was not reasonable for the Executive Council
to determine the exclusivity for the Cape Metropole and
leave the
rest to the Board. The corollary of that is inevitably that the
reasons advanced by the Provincial Government as to why
the
distinction of the geographic exclusivity of the Cape Metropole
casino and other casinos was drawn by the Executive Council
is not
rationally connected to the purpose of the empowering provision.
Neither has the Provincial Government put up a legitimate
government
purpose.
[165]   With
regard to the second reason, the papers reveal that the Executive
Council initially proposed a different
way of determining the Cape
Metropole’s: “
The distance between the Cape Metropole
and other casinos should not be less than 100 kilometres calculated
from the City Hall of
Cape Town via the nearest major road
.”
It also proposed that the “
distance between other casinos to
be negotiated between the Board and other casino licence applicants.”
The Executive Council did not provide any reason to the Board why it
made the distinction. It is true that the Executive Council
adopted
the Board’s recommendation of the 75 kilometre radius from the
City Hall but that does not suggest that its recommendation
was
informed by the rationale provided to it for the exclusivity
geographical zone of the Cape Metropole. It therefore cannot be
said
that the Board had any material input into why the Cape Metropole was
to be treated differently.
[166]   Sun
International has suggested reasons why the Executive Council made
the distinction. They are twofold. First,
it states that the
Executive Council “
wished the casino in the Metropole to be
a tourist attraction that would attract visitors to the City of Cape
Town”
and second that the “
South African
experience (and, indeed the experience in some foreign jurisdictions)
suggests that an urban casino is much more than
a gaming floor: it is
a cluster of entertainment venues and hotel facilities that functions
as a tourist attraction even for visitors
who do not gamble”.
According to this argument such a facility would require
substantial investment. Therefore, so contends Sun International, the
“
singling out
” of the Cape Metropole was
rationally connected to the government purpose of encouraging the
development of a “
world class
” casino to attract
visitors to Cape Town, and that since it is most unlikely that other
casinos in remote areas will attract
visitors to Cape Town, the
Executive Council was entitled to leave it to the Board to determine
their zones of exclusivity.
[167]   The
justification suggested by Sun International cannot stand. First, it
has not been confirmed by the Provincial
Council. Second, it is not
only undesirable, but manifestly impermissible for Sun International
to attempt to proffer an explanation
for the decision of the
Provincial Government which had already been given. This is
exacerbated by the fact that Sun International
was not part of the
decision-making and may not
ex post facto
justify it. In
National Lotteries Board v South African Education Project
2012
(4) SA 504
(SCA) at para [27], the court held that further reasons
are
ex post facto
justifications, not the true reasons for the
decision, and accepting them would be unfair to an applicant for
judicial review.
The court further endorsed the following approach of
the English Appeal Court in
R v Westminster City Council, Ex Parte
Ermakov
[1995] 2 All ER 302
(CA) at 315h-316d
‘
[T]he
purpose of reasons is to inform the parties why they have won or lost
and enable them to assess whether they have any ground
for
challenging an adverse decision. To permit wholesale amendment or
reversal of the stated reasons is inimical to this purpose.
Moreover,
not only does it encourage a sloppy approach by the decision-maker,
but it gives rise to potential difficulties . . .
{1}In many cases it
might be suggested that the alleged ture reasons were in fact second
thoughts designed to remedy an otherwise
fatal error exposed by the
judicial review proceedings. That would lead to application to
cross-examine and possibly for further
discovery, both of which are,
while permissible in judicial review proceedings, generally regarded
as inappropriate. Hearings would
be made longer and more expensive.’
[168]   Flowing
from the aforegoing, it is plain that even the Executive Council had
the power to determine the exclusivity
zones itself, it has not
explained why it decided to specify the radius of the exclusivity
zone for the Cape Metropole itself,
and leave the determination of
the rest to the Board. It follows that the distinction is arbitrary
and falls to be set aside.
[169]
The Provincial Government in its answering affidavit highlighted the
fact that the exclusivity determination in
the case of the GrandWest
casino expired 5 December 2010 and in the case of the Worcester
casino, on 8 May 2016.
Since the expiry,
the exclusivity determinations have been of no force or effect, and
exclusivity fees have been neither imposed
nor tendered. As a result,
any relief which is said to flow from an alleged conflict between the
Board’s power to impose
conditions and clauses 1.1(c) and (d)
of the Policy, is moot. I have already found that clause 1.1©
and 1.1(d) are no longer
operative and as such the Board is not bound
by them.
Does the Board have
the power to amend the location of a casino?
[170]   The
determination of whether the Board has the power to amend the
location of a casino is necessitated by Board’s
declaration
that it is not empowered to effect such amendments, and the resultant
orders sought by Tsogo Sun to the following effect:
170.1  That the
Board has the competency to consider and determine an application in
terms of section 41(2) of the WC Act for
a casino operator licence to
be amended so as to permit the holder to perform its licensed
activities from the Cape Metropole.
170.2  That the
Board be directed to consider and decide any application by the Tsogo
applicants in terms of section 41(2).
[171]   In
making that determination, I must examine the various provisions of
the WC Act since there is no provision
dealing directly with the
issue. Section 41(2) provides that:
“
if
there is a change in the circumstances in which or, in the case of
any licence holder, other than the holder of a premises licence,
the
place at which the holder of a licence wishes to perform the
activities authorized thereby which would require the conditions
of
the licence to be amended, the holder thereof shall apply to the
Chief Executive Officer for the amendment of the licence, which

application shall be accompanied by the prescribed new licence
application fee.”
Section 37 (1) (f) and
(l) empowers the Board to impose various conditions in respect of a
licence, including conditions:
“
(f)
relating to the premise in or on which gambling activities take place
including the development
and utilization thereof”; and
(l)
relating to the duration of the licence.”
The Act furthermore
empowers the Board to amend both a licence itself and the conditions
which attach to it. Sections 12(3) and
(4) of the Act provides that
the powers and functions of the Board shall be:
“
(3)
to grant, renew, amend, refuse, transfer, suspend or revoke licences
under this Act;
(4)
to impose, amend, suspend or revoke conditions in respect of any
licence at any time.”
[172]   Tsogo
Sun contends that the Board’s authority to amend a licence
“under this Act” as set out
in the aforegoing provisions
must include the power to amend the premises specified in the licence
to which it attaches. Furthermore,
so goes the contention, the
provisions of section 41(2) imply that the Board is empowered to
permit a change in the place at which
the casino licence holder is to
perform the licensed activities.
[173]   The
Provincial Government advances three reasons why the interpretation
proffered by Tsogo Sun is untenable. It
states first, that because
section 45(4) requires a casino operator licence to specify the
premises to which the licence attaches,
the Board “
has no
discretion
to determine the location of the casino operation
as part of the conditions applicable to the licence”
in
terms of section 37(l) (f), which applies only to other types of
licences.  Furthermore, the WC Act makes no provision for
the
amendment of the specified premise in a casino operator licence.
Second, the Provincial Government argues that the power of
the Board
to impose a condition in a licence relating to its duration, does not
relate to the determination of exclusivity. Third,
the Provincial
Government asserts that the issue is moot because of the exclusivity
period has expired and since then exclusivity
determinations have
been of no force and effect.
[174]
Regarding the argument that the WC Act makes no provision for the
amendment of the specified premise in a casino
operator licence, this
question cannot be answered by way of reference to section 45(4)
only, the entire scheme of the Act must
be examined. To this end,
Ngcobo J (as he then was) said the following in
Bato Star Fishing
(Pty) Ltd v Minister of Environmental Affairs and Tourism and Others
[2004] ZACC 15
;
2004 (4) SA 490
CC paragraph 90:
“
[
90]
The emerging trend in statutory construction is to have regard to the
context in which the words occur, even where the words
to be
construed are clear and unambiguous.  Recently, in
Thoroughbred
Breeders’ Association v Price Waterhouse
[73]
,
the SCA has reminded us that:
“
The
days are long past when blinkered peering at an isolated provision in
a statute was thought to be the only legitimate technique
in
interpreting it if it seemed on the face of it to have a readily
discernible meaning.  As was said in
University
of
Cape Town
v
Cape Bar Council and Another
1986
(4) SA 903
(A)
at 914D-E:
‘
I
am of the opinion that the words of s 3(2)(d) of the Act, clear and
unambiguous as they may appear to be on the face thereof,
should be
read in the light of the subject-matter with which they are
concerned, and that it is only when that is done that one
can arrive
at the true intention of the Legislature.’
The
well-known passage in the dissenting judgment of Schreiner JA in
Jaga
v Donges NO and Another; Bhana v Donges NO and Another
1950
(4)
SA
653
(A) at 662G-663A was also quoted with approval.
It is of course clear that the context to which reference is made in
the
latter case must include the long title and chapter headings.”
[175]   Earlier
on in this judgment I outlined the authority of the Board with
reference to the empowering provisions
of the WC Act as well the
seminal judgment of
Akani
. In addition, the Board is empowered
by the WC Act to determine the premises in the licence: section
35(3)(a)(iii) requires the
Board to determine whether the premises in
an application will be suitable for the licensed activity, and
section 12(3) empowers
the Board to grant a licence, which must
include the description of the premises in terms of section 45(4).
The WC Act has not
conferred this power on any other body. Section 12
(3) authorizes the Board to amend the licence. When regard is had to
all the
powers granted to the Board by the WC Act, as enumerated in
this judgment, the sensible contextual interpretation of section
41(2),
in my view, must be that Board has the power to amend the
location of a casino operator licence.
[180]
Regarding the third point raised by the Provincial Government to the
effect that the power of the Board to impose
a condition in a licence
does not relate to the determination of exclusivity, my view is that
this approach is incorrect because
section 44A vests the Board with
the power to determine exclusivity, which power it must exercise
together section 37(l)(1) in
determining the duration of the
licence.  I therefore hold that the Board has the power to amend
the location of a casino
specified in a licence.
[176]   I now
turn to consider the Board’s stance that the Tsogo applicants
are holders of a “premises licence”
in terms of the WC
Act, as opposed to a casino operator licence.
Are the applicants
holders of a premises licence?
[177]
It will be recalled that Tsogo Sun seeks a declaratory order to the
effect that the Tsogo applicants are holders
of a casino operator
licence in the light of the Board’s assertion that they are
holders of a premises licence. This assertion
is informed by the fact
that in terms of section 41(2) of the WC Act only a “
licence
holder other than the holder of a premises licence”
is allowed  to apply to amend the licence and its conditions.
That means that the Board’s view is that the Tsogo applicants,

are holders of “
a
premises licence”
,
and are not entitled to apply for its amendment  and its
conditions.  In terms the Act, a “
premises
licence
”
is: any licence referred to in section 27(c), (dA), (j) and (Ka)
[3]
,
and a casino operator licence is not part of that list, and is
defined as a licence issued in term of section 45.
[178]
Both the Provincial Government and Sun International accept that the
Tsogo applicants are holders of a casino operator
licence and the
exclusion in section 41(2) is therefore not applicable. It is clear
that the Board misdirected itself when it held
that the Tsogo Sun
applicants are holders of a premises licence. The declaration to this
effect sought by Tsogo Sun, is justified.
Conclusion
[179]
In summary, I have held that the Provincial Government has not made
out a proper case for the granting of the application
for the
postponement, as such, it must therefore be dismissed with costs.
Insofar as Tsogo Sun’s application for condonation
of the late
filing of this application, I have found that it is in the interest
of justice to grant the condonation. In so finding
I also held that
in this review application PAJA is not applicable and that the issue
of condonation had to be determined against
the backdrop of the
common law principles applicable and that it was justified and in the
interest of justice to grant it. As to
the merits, I have found that
the impugned Policy determinations which create the exclusivity
regime are invalid and of no force
and effect, and as such ought to
be declared as such. The parties had agreed that should this court
find the Policy to be invalid,
such an order should be suspended for
one year, so that a new regulatory policy for gambling can be put in
place. According to
my judgment, the Board has the powers in terms of
the Act to consider and determine an application by any of the
applicants to
relocate an outlying casino to the Cape Metropole.
Furthermore, I have found that a casino operator licence is not a
premises licence.
With regard to costs, the applicants sought costs
against the respondents who opposed this application on a joint and
several basis,
including the costs of two counsel. There is no basis
on which the general rule that costs follow the results should not
apply.
Furthermore, due to the complexity of the matter, the costs of
two counsel are, in my view, justified. These costs include the costs

of the postponement application.
[180]   In the
result, the following order is issued:
180.1  Clause 1.1(b)
of the Western Cape Gambling and Racing Policy Determinations issued
on 29 August 1997 is hereby declared
to be invalid and of no force
and effect.
180.2  Clauses
1.1(c) and 1.1(d) of the Western Cape Gambling and Policy
Determinations issued on 29 August 1997 are no longer
operative
because of effluxion of time and the Board is therefore not bound by
them.
180.3  The Board is
declared to be competent to consider and determine an application
under section 41 (2) of the Act;
180.4  The Board is
directed to consider an application brought by one of the applicants
in terms of section 41(2) of the Act;
180.5  It is
declared that a casino operator licence is not a premises licence as
envisaged in terms of section 41 (2) of the
Act.
180.6 The declaration of
invalidity of clause 1.1(b) is suspended for a period of a year so
that a new regulatory policy for gambling
can be put in place;
180.7 The first and
second respondents, as well as the fifth and sixth respondents are
ordered to pay the costs of this application
and the costs of two
counsel jointly and severally.
180.8
The first and second respondents are ordered to pay the costs of the
application for postponement, and the costs for
two counsel jointly
and severally.
NDITA;
J
[1]
Akani
Garden
Route (PTY) LTD v Pinnacle Point Casino (PTY) LTD
2001 (4) SA 501
SCA at 509 G-I.
[2]
See
also Nelson Mandela Bay Municipality v Amber Mountain Investments 3
(Pt) Ltd
2017 (4) SA 272
(SCA) 24; University of Free State v
Afriforum
2017 (4) SA 283
(SCA) at para 3; run Property Development
(Pty) Ltd v City of Cape Town
2015 (2) SA 584
(CC) at para 45.
[3]
Section 27 provides:”The licences under this Act shall . . .
(c ) be limited to gambling machines premises licences. .
. . (dA)
bingo premises licences; (J) totalizator premises licences; . . .
(Ka) bookmaker premises licences”.