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2015
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[2015] ZAGPJHC 257
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Phumelela Gaming and Leisure Ltd v Gauteng Gambling Board and Others (2014/39853) [2015] ZAGPJHC 257; [2015] 12 BLLR 1243 (LC) (6 November 2015)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA,
GAUTENG LOCAL DIVISION,
JOHANNESBURG
CASE NO: 2014/39853
DATE: 6 NOVEMBER 2015
In the matter between:
PHUMELELA GAMING AND LEISURE
LTD
..............................................................
APPLICANT
And
THE GAUTENG GAMBLING
BOARD
..............................................................
1ST
RESPONDENT
OTHER
RESPONDENTS
...................................................................
2ND
TO 9TH RESPONDENTS
J U D G M E N T
WRIGHT J
1. The applicant is a public company
that administers the sport of horse racing and conducts the business
of a totalisator in Gauteng
and other places. The applicant owns and
operates TAB betting establishments which take bets from the public
in horse racing and
other sports.
2. The first respondent Board is a
statutory body established under section 3 of the Gauteng Gambling
Act, 4 of 1995. Under section
4(1)(a) the Board has the function and
power to oversee and control gambling activities in Gauteng. Under
section 4(1)(c) the functions
and powers of the Board include “
to exercise such powers and perform such functions and duties as may
be assigned to the
board in terms of this Act and any other law.”
The second to fourth respondents are voluntary associations
representing bookmakers
in Gauteng and elsewhere. The fifth to ninth
respondents are private companies conducting bookmaking businesses.
3. The applicant is licenced by the
Board to conduct horse race meetings at Turffontein. The licence was
issued on 15 February 2002.
Under condition 10 of the licence the
applicant “shall make available visual broadcasts of race
meetings for betting purposes.
The licencee shall be entitled to
recover reasonable costs for visually broadcasting such race meeting
information, provided that
such costs are approved by the Board.”
(My emphasis). In my view, and subject to what I say in paragraphs
11 and 12 below,
the applicant is not entitled to make a profit on
visually broadcasting under condition 10. It may only recover its
costs provided
they are reasonable and the Board approves the
recovery. The costs are recovered from bookmakers who receive the
broadcasts on
tv sets in their shops.
4. The applicant formed a partnership
with two other companies. The partnership, under the name of
Tellytrack, broadcasts visual
coverage of horse races. Under clause
11.1 of the partnership agreement, concluded in about April 2013, an
Executive Committee
directs and controls the management and affairs
of the partnership business subject to the provisions of the
partnership agreement.
The applicant may appoint four members of the
seven member Executive Committee. The other two partners between them
appoint the
remaing three members. In effect, the applicant calls the
shots in the partnership. The other two partners are not joined in
the
application. The applicant speaks for them.
5. Over time, the applicant improved
the broadcasts, mainly by the addition of international content. It
wishes to realise what
it alleges is the market value of its product.
The bookmakers baulk.
6. On 9 October 2014 the Board was
seized of the impasse. The applicant and the other parties to this
application appeared before
the Board. They were legally represented.
The Board postponed the hearing and made an interim order. The order
is contained in
a letter dated 24 October 2014. The relevant part
reads “ In the interim, Phumelela is directed to ensure that
the status
quo ante, regarding the provision of the entire Tellytrack
channel to bookmakers, is immediately restored at the price at which
the Tellytrack channel was provided in 2013 plus inflation. Any
excess costs incurred by Tellytrack’s clients are to be
credited to such clients.”
7. The applicant, aggrieved at the
interim order, launched an urgent application on 30 October 2014. In
Part A, temporary relief
was sought pending Part B. In Part B the
applicant seeks the review of the Board’s decision to grant the
order. By agreement,
Part A was removed from the roll after the
parties came to a temporary arrangement and the question of costs was
reserved. Part
B is now before me. There is no appearance for the
fourth respondent.
8. The applicant alleges different
breaches of its right to fair administrative process. Without putting
too fine a point on it,
the applicant alleges that it was not warned
that the order might be granted, the decision was unlawful, the Board
failed to consider
relevant considerations, the Board was not
authorised by the Act to take the decision and the Board was not
entitled to return
to the position that had pertained earlier and the
decision was unreasonable.
9. Written submissions to the Board on
behalf of the bookmakers had given warning of what was in the air.
Mr Vetten, for the present
second respondent, alluded to such an
order during argument. In my view, this disposes of the first
complaint.
10. The first complaint is also met,
and the other complaints are met, by the fact that at the hearing the
applicant, in the person
of its CEO, Mr Du Plessis said “We are
abiding by our licence conditions, although they are uncomfortable to
us we have been
complying with our licence conditions and we will
continue to comply with our licence conditions for the foreseeable
future.”
(My emphasis). Mr Roodt, the applicant’s
attorney addressed the Board saying the same thing in different
words. The Board
took its cue from Mr Du Plessis’s undertaking
as repeated by Mr Roodt.
11. One of the items on the agenda for
9 October 2014 was an application by the applicant to amend the
licence by the deletion of
condition 10 at least insofar as the
condition might impose an obligation on the applicant to broadcast
coverage from racetracks
other than that at Turffontein. The day
before the hearing the applicant gave notice that it intended
applying to the Board for
leave to withdraw the amendment application
on the ground that the amendment was not necessary. The applicant had
taken fresh legal
advice along the lines argued by counsel for the
applicant in the present application and as set out in the next
paragraph of this
judgment.
12. Mr Cockrell SC, for the applicant
argued before me that because the licence is limited to Turffontein
in Gauteng it is of no
concern to the Board that Tellytrack
broadcasts feed from racetracks in other places, local or
international. It is not necessary
for me to decide the correctness
of this submission. The point is that Mr Du Plessis and Mr Roodt
could only have been uncomfortable
with having to abide by a
condition with which they did not agree or which they interpreted
differently to how the bookmakers understood
the condition. Mr Du
Plessis and Mr Roodt were alive to different interpretations put on
the condition by the applicant and the
bookmakers but nevertheless
chose to tell the Board that the applicant would abide the condition,
uncomfortable as that was for
the applicant. At a minimum, the Board
reasonably understood Mr Du Plessis and Mr Roodt to convey such a
message.
13. In these circumstances the order
can hardly be said to be beyond the Board’s powers as set out
in section 4(1)(a) of the
Act particularly when read in conjunction
with the undertaking as framed by Mr Du Plessis and repeated by Mr
Roodt. In my view,
part of the functions and powers of the Board
under section 4(1)(c) include those set out in section 4(1)(a).
14. The applicant points to the fact
that the order has an effect on Tellytrack and not just on the
applicant. Given that the applicant
controls Tellytrack and
represents it, the applicant has the power, as between it and the
other two partners, to order the passing
of the necessary debits and
credits in the books of the partnership to give effect to condition
10 and the order. Were this not
the case the application would
founder on the non-joinder of the other two partners in the
partnership.
15. These findings make it unnecessary
for me to deal with other defences.
Order
1. Part B of the application is
dismissed.
2. The applicant is to pay the costs of
all the respondents other than those of the fourth respondent. These
costs are to include
those of two counsel where so employed including
senior counsel where so employed. The costs are to include those
relating to Part
A on the same basis.
GC WRIGHT J
JUDGE OF THE HIGH COURT,
GAUTENG LOCAL DIVISION,
JOHANNESBURG
On behalf of the Applicant: Adv A
Cockrell SC
Adv A Friedman
Instructed by: Roodt Inc
011 685 000
On behalf of the 1st Respondent:Adv
IV Maleka SC
Adv H Mutenga
Instructed by:Tshisevhe Gwina
Ratshimbilani Inc
011 243 5027
On behalf of the 2nd Respondent: Adv
D Vetten
Instructed by:John Joseph Finlay
Cameron
011 285 0043
On behalf of the 3rd Respondent:Adv
J Wilson
Instructed by:JH Nicholson Stiller
and Geshen
031 202 9751
On behalf of the 5th to 9th
Respondents:Adv CJ Hartzenberg SC
Instructed by:Grant and Swanepoel
Attorneys
087 357 0902
Dates of Hearing: 3 and 4 November
2015
Date of Judgment: 6 November 2015