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[2016] ZASCA 193
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Shoprite Checkers (Pty) Ltd v Member of the Executive Council for Economic Development, Tourism and Environmental Affairs: KwaZulu-Natal and Others (78/2016) [2016] ZASCA 193; [2017] 1 All SA 429 (SCA) (2 December 2016)
Links to summary
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
No: 78/2016
In
the matter between:
SHOPRITE
CHECKERS (PTY) LTD
APPELLANT
and
MEMBER
OF THE EXECUTIVE COUNCIL
FOR
ECONOMIC DEVELOPMENT, TOURISM
AND
ENVIRONMENTAL AFFAIRS:
KWAZULU-NATAL
FIRST RESPONDENT
THE PREMIER: KWAZULU-NATAL
PROVINCIAL
GOVERNMENT
SECOND RESPONDENT
KWAZULU-NATAL LIQUOR
AUTHORITY
THIRD RESPONDENT
Neutral
Citation:
Shoprite
v MEC for Economic Development and Environmental Affairs,
KwaZulu-Natal
(78/2016)
[2016] ZASCA 193
(2 December 2016).
Coram:
Maya AP, Petse,
Swain and Zondi JJA and Schippers AJA
Heard:
4 November 2016
Delivered:
2
December 2016
Summary:
Statutes:
KwaZulu-Natal Liquor Licencing Act 6 of 2010: liquor licences granted
under repealed national Liquor Act 27 of 1989: KwaZulu-Natal
Liquor
Licencing Act 6 of 2010 providing for conversion of pre-existing
licences granted under 1989 Liquor Act and valid before
its
commencement: proximity of licenced premises to religious or learning
institutions: s 101(1) read with s 48(5)
(e)
not imposing an absolute prohibition to valid pre-existing liquor
licences relating to liquor premises located within a circumference
of 500 metres of a religious or learning institution as defined:
holder of such licence entitled to a licence certificate under
s 101(1), (2) and (3) of the KwaZulu-Natal Liquor Licencing Act:
such licence certificate regarded as a licence contemplated
in
s 39
(b)
(i)
or (ii) of the KwaZulu-Natal Liquor Act.
ORDER
On
appeal from:
KwaZulu-Natal
Division of the High Court, Pietermaritzburg (Chetty J sitting
as court of first instance):
1
The appeal is upheld with costs, including the costs of two counsel.
2
The order of the court a quo is set aside and substituted with the
following:
‘
1
It is declared that the KwaZulu-Natal Liquor Licensing Act 6 of 2010
(the KZN Act) does not
per
se
prohibit or render unlawful the sale or continued sale of liquor for
consumption off the licensed premises by a person (the licensee)
in
circumstances where:
1.1
such premises are situated within a circumference of 500 metres from
a learning institution and/or a religious institution as
defined in
s 1 of the KZN Act; and
1.2
if such a licensee was the holder of a liquor licence granted
pursuant to the provisions of the national Liquor Act 27 of 1989
which was in force immediately before the commencement of the KZN
Act, and which licence is regarded from the said date of
commencement,
by virtue of s 101(1)
(a)
of the KZN Act, as a
licence for the retail sale of liquor referred to in s 39
(b)
(i)
or (ii) of the KZN Act, and which has not otherwise been validly
cancelled or terminated.
2
Regulation 47 of the KwaZulu-Natal Liquor Licensing Regulations, 2014
(PN 45 published in
PG 1081
of 13 February 2014) is reviewed
and set aside.
3
The applicant’s failure to launch its review application within
180 days as provided for in
s 6
of the
Promotion of
Administrative Justice Act 3 of 2000
is condoned.
4
The costs of the application shall be borne by the respondents
jointly and severally, the one paying the other to be absolved,
including the costs of two counsel where so employed.’
JUDGMENT
Petse
JA (Maya AP, Swain and Zondi JJA and Schippers AJA concurring):
[1]
This is an appeal against a judgment of Chetty J in the KwaZulu-Natal
Division of the High Court, Pietermaritzburg. The appellant,
Shoprite
Checkers (Pty) Ltd, which is a well-known supermarket chain with a
national footprint, applied for an order declaring:
‘
1.
That the KwaZulu-Natal Liquor Licensing Act 6 of 2010 (“the KZN
Act") does not
per
se
prohibit
and/or render unlawful the sale or continued sale of liquor for
consumption off the licensed premises (being either a liquor
store or
a grocers' store) by a person in circumstances where:
1.1.
such premises are situated within a circumference of 500 metres from
a learning institution and/or a religious institution
as defined in s
1 of the KZN Act; and
1.2.
the said person was the holder of a liquor licence granted pursuant
to the provisions of the national Liquor Act 27 of 1989
which licence
was in force immediately before the commencement of the KZN Act, and
which licence is regarded from the said date
of commencement, by
virtue of s l0l(l)
(a)
of the KZN Act, as a licence for the
retail sale of liquor referred to in s 39
(b)
(i) and/or (ii) of
the KZN Act, and which licence has not otherwise been validly
cancelled or terminated;
2.
Reviewing and setting aside regulation 47 of the KwaZulu-Natal Liquor
Licensing Regulations, 2014 (PN 45 published in
PG 1081
of 13
February 2014) ("the Regulations");
3.
Extension of the period of 180 days for the launching of this
application, as envisaged in
s 9
of the
Promotion of
Administrative Justice Act 3 of 2000
, to the extent that it may be
necessary;
4.
In the alternative to paragraph 2 above, declaring that
regulation 47
of the Regulations is inconsistent with the Constitution and invalid;
5.
Directing the first and second respondents to pay the costs of this
application jointly and severally, alternatively (should
the third
respondent oppose this application) directing the respondents to pay
the costs of this application jointly and severally;
6.
Granting the applicant such further and/or alternative relief as this
Court may deem fit.’
[2]
In the court a quo, the respondents resisted the application as they
still do in this court. They, in essence, contended that
granting the
relief sought by the appellant would result in a two-tier system of
licences. And this would allow licensees under
the national Liquor
Act 27 of 1989 (1989 Liquor Act), such as the appellant, to enjoy
preferential treatment above persons granted
licences under the
KwaZulu-Natal Liquor Licencing Act 6 of 2010 (the KwaZulu-Natal
Liquor Act) which, inter alia, prohibits the
granting of licences to
persons where the proposed liquor premises are within a circumference
of 500 metres from a religious or
learning institution. Such a
situation the first respondent, the Member of the Executive Council
for Economic Affairs, Tourism
and Environmental Affairs, Province of
KwaZulu-Natal (the MEC) asserted, would be inequitable.
[3]
In opposing the application, the respondents filed a comprehensive
affidavit deposed to by the erstwhile MEC. To the extent
relevant for
the present purposes the MEC stated:
‘
18.
Under s 38 of the KZN Act no person may sell liquor “
unless
that person is licenced in terms of this Act”.
Chapter
6 sets out the licensing procedure and s 48 deals with some of the
matters to be considered by the Authority when dealing
with licence
applications.
19.
Relevant to this matter is the distance of licenced premises from
religious or learning
institutions: The Authority must:-
19.1.
satisfy itself that the proposed premises are not within a 500-metre
circumference
of a religious or learning institution; and
19.2.
consider the harm or prejudice that the licence will have on schools
and religious institutions within a
radius
of 500 metres of the licenced premises.
(I
refer to sections 48(5)
(a)
; 48(5)
(e)
and (6)
(a)
of the KZN Act.)
20.
The effect of the term radius in s 48(5)
(e)
is that licenced
premises may not be located within 79,6 metres of any religious or
learning institution. (The distance of 79,6
metres may be rounded up
to 80 metres for the sake of convenience.)
21.
I submit that s 48(5)
(e)
constitutes an outright
disqualification.
22.
The 1989 Liquor Act had dealt with the social issues in a different
manner: On the one hand
it was less prescriptive when dealing with
premises situated in the vicinity of a place of worship or school or
in a residential
area. (I refer to s 22(2)
(d)
(i)
(cc)
of the 1989 Liquor Act.) However, on the other hand it was more
restrictive with regard to trading times and days.’
[4]
The MEC went on to assert that there were compelling social reasons
which moved the provincial government to adopt, inter alia,
the
policy relating to the minimum distance of licenced premises from
religious and learning institutions. And that the provincial
government was gravely concerned at the social ill-effects of liquor
being sold from premises in close proximity to religious and
learning
institutions. The social ill-effects of sale of liquor from premises
in close proximity to religious and learning institutions
were
explained in the MEC’s answering affidavit, inter alia, as
follows:
‘
23.
Sections 48(5) and (6) of the KZN Act reflect the specific policy
decision taken by the Provincial
Government. Among these is the
prohibition on locating licenced premises 80 metres from a religious
or learning institution. I
am advised that it is not necessary for me
to deal with the reasons for this in great detail as sections 48(5)
and (6) of the KZN
Act are not being challenged. However, I can
assure this honourable court there are compelling social reasons for
the provincial
government adopting this policy with regard to the
distance of licenced premises from religious or learning
institutions. The Provincial
Government is extremely concerned at the
social effects of liquor being sold from premises located within a
distance of 80 metres
of
any
religious
or learning institution. Learners are immature and unable to make the
moral or value judgments that must be made. They
are at an age where
they are engaging in social experimentation. Research has shown a
significant link between the availability
of alcohol to learners and
absenteeism and repeating an academic year.
24.
The social situation is exacerbated at poorer schools, where learners
often do not get the
support and guidance they should, and where
their schools do not have the supporting sporting and cultural
facilities. In such
cases learners are often tempted to move away
from school premises (during or after school), and to buy alcohol.
They are of an
age where it cannot easily be identified that they are
minors, and in certain cases they may even have reached the age of
majority.
25.
Similarly those engaging in religious practices are entitled to be
kept some distance from
a point of sale.
26.
The negative effects of alcohol are well documented and the
Provincial Government has adopted
the provisions of s 48 as but
some small steps to mitigate those effects.
27.
The policies were incorporated into the KZN Act after extensive
public participation processes,
and after consideration of extensive
comments from a number of parties, including liquor manufacturers,
municipalities, wholesalers
and retailers, traders' associations, the
gaming industry, community organisations, licensees and those
providing licensing services.
28.
MEC Mchunu, my colleague responsible for Transport, Community Safety
and Liaison, has drawn
to my attention that there are 673 liquor
outlets next to places of worship, and 930 outlets next to schools in
KwaZulu-Natal.
This situation is particularly notable in urban areas.
For example, in the eThekwini Metro there are 222 outlets next to
places
of worship, and 251 outlets next to schools.’
[5] In relation to
the KwaZulu-Natal Liquor Act, the MEC stated the following:
‘
33.
I am advised that it is a common approach when repealing a law to
provide for the transition from the
prior legal order to the new
legal order, and to do so in a manner that does not unduly affect the
rights of any person when the
prior legislation ceases to be of force
and effect, unless there is a specific and contrary intention.
34. It
is for this reason that the Provincial Government provided for the
conversion process set out
in section 101 of the KZN Act. Section 101
provides as follows:-
34.1 A licence in
force immediately before the date of commencement of the KZN Act is
regarded as a licence in
the category set out in the second schedule
of Schedule 2 of the KZN Act [s 101(1)];
34.2 The holders of
old order licences are entitled to receive new form licences without
having to apply therefor
[s 101(2)];
34.3 The conversion
process takes place administratively upon payment of the prescribed
annual fee [s 101(3)
(a)
];
34.4 Old order
licensees have three years to convert their licences [s 101(3)
(b)
].
35. The
licences held by the [appellant] would therefore convert into liquor
store and grocers’
licences contemplated under s 39
(b)
(i)
and (ii) of the KZN Act. This means that the [appellant] has
benefited from the more permissive trading days and hours set out
in
Schedule 3.
36. The
conversion process in s 101 is subject to certain provisos, including
the proviso in s 101(1)
(a)
(iii) of the KZN Act, that in the
event that the terms and conditions of the license are inconsistent
with the provisions of the
KZN Act then the provisions of the KZN Act
are applicable.
37.
I respectfully submit that the effect of the proviso is that any
conditions in the [appellant]
licences that permit it to trade less
than 80 metres from a religious or learning institution are
inconsistent with the provisions
of the KZN Act, and the prohibitions
in the KZN Act must apply.’
[6]
In relation to the amnesty provisions of regulation 47(1), the MEC
stated that the KwaZulu-Natal Liquor Act proscribed some
of the
things that were lawful under the 1989 Liquor Act, such as licenced
premises being located within a circumference of 500
metres from a
religious or learning institution. Because 12 of the appellant’s
liquor outlets are located within the prohibited
distance from
religious and learning institutions this meant that the Liquor
Authority established under the KwaZulu-Natal Liquor
Act would be
compelled and justified to cancel or suspend licences in relation to
such premises. But regulation 47(1) afforded
pre-existing licences
hit by this prohibition a mechanism to apply for a removal of the
affected licences to other premises located
outside the prohibited
distance whilst at the same time allowing the licensee to continue to
operate without interruption, albeit
for a period not exceeding three
years.
[7]
The court a quo upheld the respondents’ contentions and, in
consequence, dismissed the application with costs. It subsequently
granted the appellant leave to appeal to this court.
[8]
The facts in this case are substantially common cause. It is only in
relation to the interpretation of the relevant statutory
prescripts
which apply to those facts that the parties are in sharp
disagreement. And they are the following.
[9]
The appellant is licenced to sell liquor in its grocery stores and
liquor outlets throughout the country for consumption off
its
licenced premises. It is the holder of 110 licences operative in the
province of KwaZulu-Natal, as contemplated in s 39
(b)
of the KwaZulu-Natal Liquor Act. The majority of those licences were
granted under the 1989 Liquor Act. Twelve of these licences
relate to
premises which are situated within approximately 80 metres of
religious and learning institutions. They were all granted
under the
1989 Liquor Act, substantial parts of which were repealed on 28
February 2014 in terms of s 100 of the KwaZulu-Natal
Liquor Act,
read with schedule 1 thereof.
[10]
On 1 August 2012 certain of the sections of the KwaZulu-Natal Liquor
Act came into operation. Some of its provisions were materially
different from those of the 1989 Liquor Act. As contemplated in
s 101(1) read with s 101(2) of the KwaZulu-Natal Liquor
Act
– which will be dealt with in more detail later – the
appellant applied to the Liquor Authority – established
under
the KwaZulu-Natal Liquor Act to grant liquor licences – for
licence certificates in respect of its pre-existing liquor
licences.
It also paid the prescribed fees. Briefly, s 101(1) provides
that a licence granted under the 1989 Liquor Act and
in force
immediately before the commencement of the KwaZulu-Natal Liquor Act
is regarded as a licence in its relevant category
from the date of
commencement of the KwaZulu-Natal Liquor Act subject to certain
conditions. Essentially s 101 provides for
conversion, subject
to certain requirements, of old-order licences granted under the 1989
Liquor Act.
[11]
The appellant applied for its pre-existing liquor licences to be
converted to licences as contemplated in s 39 of the
KwaZulu-Natal Liquor Act. But the Liquor Authority declined to issue
the requested licence certificates. It adopted the position
that it
was precluded from doing so because the terms and conditions of the
appellant’s pre-existing liquor licences that
permit it to
operate its liquor outlets within a circumference of 500 metres of
religious and learning institutions are hit by
the prohibition in
s 48(5)
(e)
read with s 101(1)
(a)
(ii)
and (iii) of the KwaZulu-Natal Liquor Act.
[12]
The Liquor Authority also took the view that the appellant ought
instead to apply for temporary amnesty under regulation 47(1)
–
promulgated in terms of s 99
(q)
of the KwaZulu-Natal Liquor Act – for the removal of the
affected licences to premises which are not located within a
circumference
of 500 metres of a religious and learning institution.
The appellant asserted that the MEC was not empowered to render
unlawful,
by way of a regulation, that which the KwaZulu-Natal Liquor
Act had not declared unlawful. Nor was the MEC empowered to compel it
to apply for temporary amnesty when it had not contravened any law or
to oblige it to apply for the removal of its licences from
the
licenced premises when its operations on such licenced premises are
not unlawful.
[13]
These entrenched divergent positions taken by the parties prompted
the appellant to apply for a declaratory order in the court
a quo in
the terms mentioned in para 1 above.
[14]
The court a quo rightly stated that s 101(1)
(a)
(iii)
read with s 48(5)
(e)
of the KwaZulu-Natal Liquor Act was central to the determination of
the dispute between the parties. It also noted that the appellant
had
contended ‘that the prohibition [in s 48(5)
(e)
]
is only applicable to those [persons] applying for new licences and
not to those who are pre-existing holders of licences issued
under
the 1989 Act’.
[15]
In reaching its conclusion, the court a quo reasoned as follows
(paras 50-51):
‘
On
a proper reading of the [KwaZulu-Natal Liquor Act], I am of the view
that s 48(5)
(e)
applies
as an absolute prohibition against all retail liquor licence holders,
inclusive of new applicants and those who acquired
licences under the
1989 [Liquor] Act. The new provisions in the [KwaZulu-Natal Liquor
Act] allow the liquor authority to regulate
the retail industry from
an even playing-field, without one category of holders able to ply
their trade in the proximity of learners,
despite the state's efforts
to create an enabling environment for future generations to achieve
the aspirational values in our
Constitution of improving the quality
of life for all citizens and to free the potential of each person.
In
light of the above, I find that s 101 read with s 48(5)
(e)
per se
prohibits
and renders it unlawful for a person to sell or continue to sell
liquor for consumption off licenced premises (being either
a liquor
or a grocers' store) where such premises are within a circumference
of 500m from a learning institution and/or a religious
institution,
and that the prohibition applies equally to new applicants for
licences as well as to persons granted licences under
the 1989
[Liquor] Act.’
Having
come to this conclusion, the court a quo deemed it unnecessary to
make a definitive determination in relation to the constitutional
challenge to regulation 47(1).
[16]
An analysis of the relevant statutory framework is now apposite. I
propose to commence with s 22 of the 1989 Liquor Act
which still
applies to applications pending on the date of commencement of the
KwaZulu-Natal Liquor Act. It deals with consideration
of applications
for licences. It provides that the Liquor Board shall not grant an
application for a liquor licence in certain
defined circumstances. Of
particular relevance is s 22(2)
(d)
(ii)
(cc)
which states that if the premises are situated in the vicinity of a
place of worship or school or in a residential area, the Liquor
Board
shall not grant an application for a licence unless ‘the
business will be carried on in a manner that would not disturb
the
proceedings in that place of worship or school or otherwise prejudice
the residents of that residential area’.
The
KwaZulu-Natal Liquor Act
[17]
The KwaZulu-Natal Liquor Act sets out in s 2 as one of its
objects the following:
‘
(
a
)
to provide for the regulation of the micro-manufacturing and the
retail sale of liquor and
methylated spirits;
(
b
)
to provide for mechanisms aimed
at reducing the socio-economic and other effects of alcohol
abuse;
(
c
)
to provide for public
participation in the consideration of applications for registration;
and
(
d
)
to promote the development of a
responsible and sustainable retail and micro- manufacturing
liquor
industry in a manner that facilitates—
(i)
the entry of new
participants into the industry;
(ii)
diversity of ownership in the
industry; and
(iii)
an ethos of social responsibility in the industry.’
[18]
Section 38, in turn, provides that no person may sell liquor for
retail or micro-manufacture liquor unless that person is licenced
in
terms of the Act. A contravention of this section constitutes an
offence.
[19]
It bears mentioning that applications for licences under this Act are
set out in Chapter 6. Section 41 deals in detail with
the procedure
for licence applications. Section 41(2) in particular provides that
an application for a liquor licence must, inter
alia, be accompanied
by the physical address of the premises where the business will be
conducted or a description of the location
of the premises in terms
of identifiable landmarks.
[20]
Section 48(4)
(a)
is of importance and provides that the Liquor
Authority may, in granting the application, impose such terms and
conditions as it
may deem fit, and such trading days and trading
hours as it may determine. Of crucial importance for the present
purposes is s 48(5)
(e)
which provides that before
granting an application, the Liquor Authority must, in addition to
the requirements set out in subsections
(a)
to
(d)
and
(f)
, satisfy itself that:
‘
The
proposed premise is not located within a circumference of 500 metres
of any religious or learning institutions.’
[21]
Section 101, which deals with ‘conversion of licences,
approvals, notices and determinations’, was also considered
in
detail by the court a quo. Its provisions read:
‘
(1)
Notwithstanding the provisions of section 39, and in accordance with
the transitional provisions
of the Liquor Act [which is defined in
s 1 as meaning the Liquor Act 59 of 2003] –
(
a
)
every licence or approval set out in the first column
of Schedule 2
and in force immediately before the date of commencement of this Act,
is from the commencement date of this Act regarded
as a licence in
the category set out in the second column of Schedule 2: Provided
that—
(i)
the terms and conditions and trading days and trading hours
applicable
to such licence, immediately prior to this Act coming into
effect, continue in force until the date upon which such licence is
required to be renewed in terms of the Liquor Act, 1989 (Act No. 27
of 1989);
(ii)
the said terms and conditions and trading days and trading hours are
not inconsistent
with the provisions of this Act; and
(iii)
in the event that the said terms and conditions or trading days and
trading
hours are inconsistent with the provisions of this Act, then
the provisions of this Act are applicable;
(
b
)
a notice issued in terms of section 33 of the Liquor
Act, 1989 (Act
No. 27 of 1989), and in force immediately before the date of
commencement of this Act, is regarded as conditions
set out in
writing in terms of sections 49 and 58 of this Act; and
(
c
)
any determination made in terms of section 51 of
the Liquor Act, 1989
(Act No. 27 of 1989), and in force immediately before the date of
commencement of this Act, is regarded as
a consent granted in terms
of section 72 (1) of this Act.
(2)(
a
)
The holders of the licences, approvals, notices and determinations
referred to
in subsection (1) are entitled to a licence certificate
or permit in terms of section 62 of this Act for the relevant
category
of licence as contemplated in section 39, without having to
comply with the application procedure for such a licence or permit
contemplated in Chapter 6.
(
b
)
All existing terms and conditions and trading hours applicable
to
such licences, approvals, notices and determinations must be endorsed
on the licence certificate in accordance with subsection
(1).
(3)(
a
)
The holders of the licences, approvals, notices and determinations
referred to
in subsection (1) must receive such licence certificate
or permit upon presentation to the Liquor Authority of proof of their
licences,
approvals, notices and determinations referred to in
subsection (1) and the terms and conditions and trading hours to
which such
licences, approvals, notices and determinations are
subject, and upon payment of the annual fee prescribed in terms of
section
64.
(
b
)
The holders of the licences, approvals, notices and determinations
referred to in subsection (1) must obtain their licence certificates
or permits under this Act within three years of the commencement
of
this Act.
(4)
In the event that a holder does not convert the licences, approvals,
notices and determinations
within the prescribed period referred to
in subsection (3) (
b
),
such licences, approvals, notices and determinations become invalid,
as provided for in the transitional provisions of the Liquor
Act [59
of 2003].’
[22]
Section 102(2) which, in turn, deals with the transitional
arrangements and validation of pre-existing licences also bears
mention. It provides that:
‘
(2)
Notwithstanding anything to the contrary contained in this Act, on
the date on which this Act comes into operation, any
lawful act,
determination, designation, decision, matter or any other thing done,
made, taken, executed or carried out or purported
to have been done,
made, taken, executed or carried out by the Liquor Board or a member
of staff of the Liquor Board, including
a member of the Liquor Board
or the Chief Executive Officer of the Liquor Board, or the
responsible Member of the Executive Council,
in pursuance of the
Liquor Act, is regarded to have been done, made, taken, executed or
carried out or issued under this Act.’
[23]
Section 99 empowers the MEC to make regulations for a variety of
matters. Of importance in this case is s 99
(q)
which provides that the MEC must make regulations regarding ‘the
manner and form in which an application for temporary amnesty
must be
made’. Pursuant to this power, the MEC promulgated the
regulations, published in Provincial Notice 45 in the Provincial
Gazette 1081 of 13 February 2014.
[24]
It is regulation 47(1) which is of relevance in this case. It
provides that the Liquor Authority may grant temporary amnesty
only
to pre-existing and valid licence holders licenced in terms of the
1989 Liquor Act in respect of two categories of licenced
premises one
of which is ‘licenced premises situated within an area with a
500 metre circumference from religious and learning
institutions’.
The second category is in relation to convenience stores franchised
to a service station selling petrol, diesel
or other petroleum
products to the public.
[25]
The court a quo was cognisant of the fact that the resolution of the
divergent contentions advanced by the parties lay in the
proper
interpretation of the key provisions of the KwaZulu-Natal Liquor Act
and regulation 47(1) set out above (paras 19-24) in
accordance with
the well-established canons of construction of documents, be it a
statute or contract.
[1]
It is to that exercise that I now turn.
Interpretation
of the provisions
[26]
A useful point of departure is the Constitution.
[2]
Section 39(2) of the Constitution enjoins the courts to promote the
spirit, purport and objects of the Bill of Rights when interpreting
any legislation. (See
Investigating
Directorate: Serious Economic Offenses v Hyundai Motor Distributors
(Pty) Ltd & others
;
In
re Hyundai Motor Distributors (Pty) Ltd & others v Smit NO &
others
[2000] ZACC 12
;
2001
(1) SA 545
(CC) paras 21-22.) The appellant’s right which is
implicated in this case is the right to, inter alia, freely choose
trade,
namely to freely engage in an economic activity of its choice
as contained in s 22 of the Constitution. However, this right
may be regulated by law. And, as this court made plain in
Endumeni
,
[3]
the ‘inevitable point of departure is the language of the
provision itself’ which must be read in context and having
regard to the purpose of the provisions and the background to the
preparation and production of the document.
[27]
In this court, counsel for the respondents strongly relied, as he did
in the court a quo, on the provisions of s 101(1)
read with
s 48(5)
(e)
of the KwaZulu-Natal Liquor Act. He submitted that liquor licences
granted under the 1989 Liquor Act did not, with the commencement
of
the KwaZulu-Natal Liquor Act, continue as deemed licences under the
latter Act. Rather, so the argument proceeded, they were
conversions
which are subject to the provisos to s 101(1)
(a)
.
The material provisos are contained in s 101(1)
(a)
(ii)
and (iii). These provide that the terms and conditions and trading
days and trading hours attaching to pre-existing licences
must not be
inconsistent with the provisions of the [KwaZulu-Natal Liquor] Act.
And, that if they are, the provisions of the Act
prevail.
[28] In support of their contentions,
the respondents asserted that the concept of ‘terms’ of
the licence as envisaged
in the KwaZulu-Natal Liquor
Act
includes the premises at which the sale of liquor is conducted. That
is the position because s 41(2)
(a)
requires
that the premises must be identified in the application, and the
licence is granted subject to ‘terms and conditions’
which must of necessity include the premises. Accordingly, the
conversion of the appellant’s pre-existing 12 licences would
be
hit by the absolute prohibition imposed by s 48(5)
(e)
of
the KwaZulu-Natal Liquor Act.
[29]
To my mind the respondents’ contentions are unsustainable. It
is true that s 101(1)
(a)
is made subject to the provisos that the terms and conditions,
trading days and trading hours relating to pre-existing licences
continue in force unless they are inconsistent with s 101(1)
(a)
(i),
(ii) and (iii), in which event the provisions of the KwaZulu-Natal
Act would prevail and thus apply.
[30]
In my view it is manifest from the provisions of s 101 that
holders of pre-existing licences are entitled to licence certificates
in terms of s 62 of the KwaZulu-Natal Liquor Act without having
to comply with the application procedure for such licence.
The
entitlement of the holder of a licence to such a licence certificate
is subject to the Liquor Authority being satisfied, upon
presentation
of proof of the licence and payment of the prescribed annual fee,
that the holder had a valid licence on the date
of commencement of
the KwaZulu-Natal Liquor Act.
[31]
Section 62(1) in turn provides, in peremptory terms, that the Chief
Executive Officer must, once a licence has been granted
by the Liquor
Authority, issue a licence certificate in the prescribed form which
must, inter alia, include: (a) the premises in
respect of which a
licence has been granted; and (b) the terms and conditions upon which
the licence was granted, including the
trading days and trading
hours.
[32]
It follows from the interpretation of s 101(1) discussed above
that s 48(5)
(e)
of the KwaZulu-Natal Liquor Act is not applicable to applications for
conversions under s 101(1). This must be so for at least
two
reasons. First, s 48(5)
(e)
is contained in Part 2 of Chapter 6 which deals with applications for
retail sale of liquor for consumption on or off premises.
Second,
s 101(2)
(a)
,
in express terms, excludes the application procedure for a licence as
contemplated in Chapter 6. However, counsel for the respondents
strongly relied on the third proviso to s 101(1)
(a)
.
He contended that the ‘terms’ of the licence include the
premises. And because the appellant’s premises are
located
within a circumference of 500 metres of religious and learning
institutions as defined in s 1 of the KwaZulu-Natal
Liquor Act,
the appellant’s 12 pre-existing licences are inconsistent with
s 48(5)
(e)
which is an absolute prohibition applicable to all licences.
[33]
These contentions, in my view, cannot be upheld. The location of the
premises was not a term or condition of the appellant’s
licences under the 1989 Liquor Act. Nor can the location of the
premises be a term or condition under the KwaZulu-Natal Liquor
Act.
Moreover, both the 1989 Liquor Act and the KwaZulu-Natal Liquor Act
draw a clear distinction between premises relating to
a licence and
the terms and conditions upon which a licence may be granted. There
are three clear contextual indicators of this
in the latter Act.
First, as previously mentioned, s 41(2)
(a)
provides that an application for a liquor licence must include and be
accompanied by ‘the physical address of the premises
where the
business will be conducted or a description of the location of the
premises in terms of identifiable landmarks’.
It therefore goes
without saying that an application for a licence unaccompanied by the
physical address of the premises or a description
of the location
would be still-born. Second, the opening words ‘before granting
the application’ in s 48(5) serve
as a clear indication
that the Liquor Authority may not grant an application for a liquor
licence unless all six requirements in
that section have cumulatively
been met. The question whether or not these requirements have been
met would therefore logically
arise before the approval or granting
of the licence. Third, as already mentioned in para 31 above,
s 62(1)
(a)
provides that after the Liquor Authority has granted a licence and
the prescribed fee has been paid, the Chief Executive Officer
must
issue a licence certificate which must, inter alia, include: (a) the
premises in respect of which a licence has been granted
(s 62(1)
(a)
(iii));
and (b) the terms and conditions upon which the licence was granted,
including the trading days and trading hours (s 62(1)
(a)
(iv)).
This is further reinforced by s 48(4)
(a)
(i)
which states that the Liquor Authority must, after having considered
an application for a licence, either grant such application
‘subject
to such terms and conditions [as] it may deem fit’. This must
then mean that the decision to grant the application
(in relation to
specified premises as disclosed upfront in the application) precedes
the consideration of any terms and conditions
that the Liquor
Authority may deem fit to impose. Put differently, the question
whether or not to attach terms and conditions to
a licence arises
only once the requirements of sections 41(2) and 48(5) have been
satisfied.
[34] To my mind, the meaning
attributed to the language of the provisions of the KwaZulu-Natal
Liquor Act discussed above, with
due regard to the context and the
purpose of the provisions, is a more plausible and sensible one. On
this score I am fortified
by the statement in
Commissioner, South
African Revenue Service v Bosch & another
[2014] ZASCA 171
;
2015 (2) SA 174
(SCA), made in the context of statutory
interpretation, which is instructive. This court said (para 9):
‘
.
. . There may be rare cases where words used in a statute or contract
are only capable of bearing a single meaning, but outside
of that
situation it is pointless to speak of a statutory provision or a
clause in a contract as having a plain meaning. One meaning
may
strike the reader as syntactically and grammatically more plausible
than another, but, as soon as more than one possible meaning
is
available, the determination of the provision's proper meaning will
depend as much on context, purpose and background as on
dictionary
definitions or what Schreiner JA referred to as “excessive
peering at the language to be interpreted without sufficient
attention to the [historical] contextual scene”.’
[35] Accordingly, even if one were to
accept that the divergent interpretations for which the parties
contended are both tenable,
there is a compelling reason why the
appellant’s contentions must prevail. More than a century ago
in
Curtis v Johannesburg Municipality
1906 TS 308
at 311 Innes
CJ said:
‘
The
general rule is that, in the absence of express provisions to the
contrary, statutes should be considered as affecting future
matters
only; and more especially that they should if possible be so
interpreted as not to take away rights actually vested at
the time of
their promulgation. The legislature is virtually omnipotent, but the
courts will not find that it intended so inequitable
a result as the
destruction of existing rights unless forced to do so by language so
clear as to admit of no other conclusion.’
(See also
Veldman v Director of
Public Prosecutions, Witwatersrand Local Division
2007 (3) SA 210
(CC) para 26.)
[
36]
In
Nissan
SA (Pty) Ltd v Commissioner for Inland Revenue
[1998] ZASCA 59
;
1998
(4) SA 860
(SCA) this court said (at 870I-871A):
‘
.
. . If on one interpretation of the amended provision it would
retroactively destroy vested rights acquired . . . in terms of
the
provision before its amendment, but on another interpretation it
would not, that would provide, I think, a strong reason for
preferring the latter interpretation unless the language used cannot
possibly accommodate it. . . .’
As
to the nature of a right inherent in a liquor licence, this court, in
Pietermaritzburg
Corporation v South African Breweries Ltd
1911
AD 510
at 511, pointed out that although a liquor licence operates on
specified premises, it has a commercial value apart from the premises
to which it relates. (See also the minority judgment of Madlanga J in
Shoprite
Checkers (Pty) Ltd v MEC for Economic Development, Eastern Cape &
others
[2015]
ZACC 23
; 2015(6) SA 125 (CC) para 132.)
[37]
Thus, there is, in my view, much to be said for the appellant’s
submission that had the provincial legislature intended
to impose an
absolute prohibition also in respect of pre-existing licences in
relation to licenced premises located within a circumference
of 500
metres of religious or learning institutions, it would have done so
in the clearest of terms as it has done in s 95(1)
of the
KwaZulu-Natal Liquor Act in relation to sale of liquor in convenience
stores franchised to service stations selling petrol,
diesel or other
petroleum products to the public. Bearing the aforegoing
considerations in mind, there can be no doubt that s 48(5)
(e)
cannot bear the meaning ascribed to it by the court a quo.
[38]
Finally, it was argued on behalf of the respondents that to hold that
s 48(5)
(e)
does not apply to pre-existing licences would result in an untenable
situation. This was so because it would mean that the appellant
would
retain its 12 licences free of the statutory obligation imposed under
s 22(2)
(d)
(i)
(cc)
of
the 1989 Liquor Act. As mentioned earlier, s 22(2)
(d)
(i)(cc)
provided that the Liquor Board shall not grant an application for a
liquor licence if the premises are situated in the vicinity
of a
place of worship or school or in a residential area, unless the
business will not be carried on in a manner that would not
disturb
the proceedings in that place of worship or school or prejudice the
residents of that residential area. And, as the statutory
obligation
provided for in s 22(2)
(d)
(i)
(cc)
‘would not be endorsed on the licence certificate in terms of
s 101(2)
(b)
,
it being not a term or condition applicable to the affected licences,
the appellant would thereby obtain a licence certificate
under
s 101(2)
(a)
free of the encumbrance arising from s 22(2)
(d)
(i)
(cc)
of the 1989 Liquor Act following its repeal. In order to obviate such
an anomalous result it was therefore necessary to construe
s 22(2)
(d)
(i)
(cc)
as a term of the licence. Seen in this light it would thus be
inconsistent with s 48(5)
(e)
.
[39]
The answer to this argument, in my opinion, is that advanced in the
countering submissions on behalf of the appellant. And
it is this.
Section 12(2)
(c)
of the Interpretation Act 33 of 1957 provides that: ‘[w]here a
law repeals any other law, then unless the contrary intention
appears, the repeal shall not affect any right, privilege, obligation
or liability acquired, accrued or incurred under any law
so
repealed.’ And absent a contrary intention manifest from the
KwaZulu-Natal Liquor Act, it must ineluctably follow that
the
statutory obligation incurred under s 22(2)
(d)
(i)
(cc)
remains extant. (See, for example,
Chagi
& others v Special Investigating Unit
2009
(2) SA 1
(CC) paras 31-32;
Msunduzi
Municipality v MEC for Housing, KwaZulu-Natal & others
2004
(6) SA 1
(SCA) para 21.)
[40]
This then brings me to the application to review and set aside
regulation 47(1)
(a).
Although
the conclusion to which I have come in relation to the interpretation
of sections 48(5) and 101 of the KwaZulu-Natal Liquor
Act is
dispositive of this appeal, the appellant persisted in its quest to
have regulation 47(1)
(a)
reviewed and set aside. The review application was launched in the
court a quo on 7 October 2014. As the regulations were promulgated
on
13 February 2014 the review application was brought 55 days outside
the 180 day period prescribed in
s 7(1)
of the
Promotion of
Administrative Justice Act
3 of 2000 (PAJA). Consequently, the
appellant applied for condonation in terms of
s 9
of PAJA. This
application was not opposed by the respondents, presumably because
they had not suffered any prejudice as a consequence
of the delay.
Thus, nothing further need be said in relation to this issue save to
say that in light of the respondents’
stance and the reasons
proffered by the appellant for the delay and the dictates of justice
it should be granted.
[41]
As previously mentioned,
regulation 47(1)
empowers the Liquor
Authority to grant temporary amnesty only to pre-existing and valid
licence holders licenced under the 1989
Liquor Act in the two
categories of licence holders specified therein. First, where the
licenced premises are, in terms of the
KwaZulu-Natal Liquor Act,
situated within a circumference of 500 metres of religious and
learning institutions. Similarly, it requires
licence holders who
sell liquor in convenience stores franchised to a service station
selling petrol, diesel of other petroleum
products to the public to
apply for temporary amnesty.
[42]
The validity of regulation 47 was impugned on two bases. First, it
was submitted on behalf of the appellant that the KwaZulu-Natal
Liquor Act does not prohibit pre-existing licence holders in category
(i) from continuing trading in their premises. Second, in
relation to
category (ii) and following the insertion of s 95(1A)
[4]
into the KwaZulu-Natal Liquor Act, the prohibition on sale of liquor
in convenience stores franchised to service stations does
not apply
to pre-existing licence holders. Consequently, so the argument went,
s 99(1)
(q)
does not place an obligation on holders of pre-existing licences
mentioned in the two categories of regulation 47(1) to apply for
temporary amnesty. Second, it was contended that regulation 47(1)
violates the principle of legality to the extent that it purports
to
render unlawful what the KwaZulu-Natal Liquor Act has not declared
unlawful. And hence regulation 47 serves no rational purpose.
[43]
The respondents argued that the regulation is authorised and serves a
rational purpose. In support of their contentions the
respondents,
relying on the judgments of the Constitutional Court in
Executive
Council, Western Cape v Minister of Provincial Affairs and
Constitutional Development & another
;
Executive
Council, KwaZulu-Natal v The President of the Republic of South
Africa & others
[1999] ZACC 13
;
2000
(1) SA 661
(CC) paras 122-124;
Justice
Alliance of South Africa v The President of the Republic of South
Africa
[2011]
ZASCC 23;
2011 (5) SA 388
(CC) paras 52-55, contended that regulation
47(1) is authorised by the KwaZulu-Natal Liquor Act and thus
rational. The respondents’
contentions are, in my view,
predicated on the supposition that the court a quo was correct in its
conclusion, namely that s 48(5)
(e)
also applies to pre-existing licences granted under the 1989 Liquor
Act and sought to be converted under s 101(1).
[44]
In
Pharmaceutical
Manufacturers Association of SA & another: In Re Ex Parte
President of the Republic of South Africa & others
[2000] ZACC 1
;
2000
(2) SA 674
(CC) – a case concerned with the exercise of
executive powers by the President – the Constitutional Court
reiterated
that ‘It is a requirement of the rule of law that
the exercise of public power by the Executive and other functionaries
should
not be arbitrary. Decisions must be rationally related to the
purpose for which the power was given, otherwise they are in effect
arbitrary and inconsistent with this requirement.’
[5]
[45] The Constitutional Court went on
to say (para 86):
‘
The
question whether a decision is rationally related to the purpose for
which the power was given calls for an objective enquiry.
Otherwise a
decision that, viewed objectively, is in fact irrational, might pass
muster simply because the person who took it mistakenly
and in good
faith believed it to be rational.’
In
Fedsure
Life Assurance Ltd & others v Greater Johannesburg Transitional
Metropolitan Council & others
[1998] ZACC 17
;
1999
(1) SA 374
(CC) para 58 the Constitutional Court stated that it was
‘central to the conception of our constitutional order that the
Legislature and Executive in every sphere are constrained by the
principle that they may exercise no power or perform no function
beyond that conferred upon them by law’. Accordingly, whenever
action, by the Executive or other functionaries fails to pass
the
rationality requirement it will be liable to be set aside as
unlawful. And in light of the earlier conclusion that
sections 48(5)
(e)
and 95(1) do not apply to pre-existing licences as the court a quo
found, it follows that regulation 47 does not serve any rational
purpose and can therefore not survive. It is therefore liable to be
set aside as irrational. Indeed, nowhere does the KwaZulu-Natal
Liquor Act state under what circumstances must an application for
temporary amnesty be made. The only reference to amnesty is in
s 40
which finds no application in this case.
[46]
It remains to note that the policy considerations that underpin the
provisions of s 48(5)
(e)
as explained in the respondents’ answering affidavit referred
to in paras 4 and 5 above are undoubtedly laudable. And, as
the
courts are enjoined to be forever cognisant of the exclusive sphere
of the executive and legislative arms of government
[6]
,
it is necessary to emphasise that this appeal is not about
government’s powers to formulate policy nor to pass
legislation.
Rather, it is all about interpretation of the words used
in the KwaZulu-Natal Liquor Act in the context of the overall scheme
of
the Act. (See in this regard:
Norvartis
SA (Pty) Ltd v Maphil Trading (Pty) Ltd
[2015]
ZASCA 111
;
2016 (1) SA 518
(SCA) para 28.). Should the outcome of
this case be regarded as undesirable, then the remedy still lies with
the legislature. (Compare
Weare
& another v Ndebele NO & others
[2008]
ZACC 20
;
2009 (1) SA 600
(CC) para 58.)
[47] It follows from all of what has
been said above that the court a quo was wrong in its conclusion.
Accordingly the appeal must
succeed. The following order is made:
1
The appeal is upheld with costs, including the costs of two counsel.
2
The order of the court a quo is set aside and substituted with the
following:
‘
1
It is declared that the KwaZulu-Natal Liquor Licensing Act 6 of 2010
(the KZN Act) does not
per
se
prohibit or render unlawful the sale or continued sale of liquor for
consumption off the licensed premises by a person (the licensee)
in
circumstances where:
1.1
such premises are situated within a circumference of 500 metres from
a learning institution and/or a religious institution as
defined in
s 1 of the KZN Act; and
1.2
if such a licensee was the holder of a liquor licence granted
pursuant to the provisions of the national Liquor Act 27
of 1989
which was in force immediately before the commencement of the KZN
Act, and which licence is regarded from the said date
of
commencement, by virtue of s 101(1)
(a)
of the KZN Act, as a
licence for the retail sale of liquor referred to in s 39
(b)
(i)
or (ii) of the KZN Act, and which has not otherwise been validly
cancelled or terminated.
2
Regulation 47 of the KwaZulu-Natal Liquor Licensing Regulations, 2014
(PN 45 published in
PG 1081
of 13 February 2014) is reviewed
and set aside.
3
The applicant’s failure to launch its review application within
180 days as provided for in
s 6
of the
Promotion of
Administrative Justice Act 3 of 2000
is condoned.
4
The costs of the application shall be borne by the respondents
jointly and severally, the one paying the other to be absolved,
including the costs of two counsel where so employed.’
___________________
X
M PETSE
JUDGE
OF APPEAL
APPEARANCES:
For
the Appellant:
J J Gauntlett SC (with G A du Toit)
(Heads of argument
prepared by M W Janisch SC
with G A du Toit)
Instructed by:
Werkmans Attorneys, Tygervalley
c/o McIntyre & Van der Post,
Bloemfontein
For
the Respondents:
A J Dickson SC
Instructed by:
PKX Attorneys, Pietermaritzburg
c/o Lovius Block,
Bloemfontein
[1]
Natal Joint
Municipal Pension Fund v Endumeni Municipality
[2012]
ZASCA 13
;
2012 (4) SA 593
(SCA) para 18.
[2]
Constitution of
the Republic of South Africa Act 108 of 1996.
[3]
Above para 18.
[4]
Subsection (1A)
was inserted by s 5 of the KwaZulu-Natal Liquor Licensing
Amendment Act 3 of 2013 and came into operation
on 13 February 2014.
[5]
Para 85.
[6]
National
Treasury & others v Opposition to Urban Tolling Alliance &
others
[2012]
ZACC 18
;
2012 (6) SA 223
(CC) paras 65-68.