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2011
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[2011] ZAGPPHC 181
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Steyn v Gauteng Provincial Liquor Board and Another, Fortuna Trade 162 (Pty) Ltd v Gauteng Provincial Liquor Board and Another (51977/11, 52369/11) [2011] ZAGPPHC 181 (30 September 2011)
NOT
REPORTABLE
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTH
GAUTENG HIGH COURT)
Case
Number: 51977/11, 52369/11
DATE:30/09/2011
In
the matter between:
MARK
JOSPH
STEYN
.............................................................................................
APPLICANT
vs
THE
GAUTENG PROVINCIAL LIQUOR
BOARD
.........................................
1st
RESPONDENT
QEDANI
MAHLANGU
N.O.
............................................................................
2nd
RESPONDENT
And
In the matter between:
FORTUNA
TRADE 162 (PTY)
LTD
..........................................................................
APPLICANT
Vs
THE
GAUTENG PROVINCIAL LIQUOR
BOARD
.........................................
1st
RESPONDENT
QEDANI
MAHLANGU
N.O.
.........................................................................
2ND RESPONDENT
JUDGMENT
FABRICIUS
J,
1.
By agreement between the parties the two applications before me in
the urgent court were consolidated. The arguments on behalf
of the
relevant parties overlap to a large extent and I will deal with them
hereunder after I have briefly set out the facts pertaining
to each
individual application.
2.
Fortuna Trade
In
this application the applicant seeks the following relief:
2.1
A declaratory order that the moratorium imposed by the second
respondent is illegal and, accordingly, an order directing the
first
respondent and its staff in the normal run of the empowering
provisions of the Gauteng
Liquor Act, 2 of 2003
, to receive and
consider applications, including applications for catering permits;
2.2
An order authorising the applicant to trade in liquor as if the
Restaurant Liquor License applied for, for the business known
as
Ottowa Creek Spur, situated at Shop 1, Karaglen Mall, corner Harris
Avenue and Baker Road, Erf 1514, Edenglen, Edenvale, district
of
Germiston, was granted, until such time as the first respondent has
considered and decided the said application;
2.3
Costs
The
purpose of this order is stated to be the following:
"The
applicant approaches the Honourable Court for orders directing the
first respondent and its administrative staff to accept
lodgement of
applications tendered in terms of the provisions of the Gauteng
Provincial
Liquor Act and
to process the same in accordance with the
Act, notwithstanding the fact that the second respondent has
announced a so-called moratorium
on the acceptance and consideration
of certain of the prescribed applications referred to in the Gauteng
Liquor Act. In
the alternative the applicant approaches the
Honourable Court for interim court orders to offset the prejudice it
is suffering
resulting from the announced moratorium."
3.
The applicant then makes the following allegations:
3.1
"In July 2011 the second respondent announced a moratorium on
the acceptance and considerations for new liquor licences,
applications of the transfer of licences and applications for
occasional or catering licences.
3.2This
announcement was devoid of any principle of law in terms of which it
could have been done, and it was published in the open
press, not
gazetted as one would have expected if it was a competent step for
the second respondent to take.
3.3
From Annexure "C it can be gleamed that the reason for the
so-called moratorium for a period of 6 months from 8 August
2011, is
to enable the first respondent to "get its house in
order"
to catch up with the arrear work, and to sniff out corruption,
incompetence, etc.
3.4
I respectfully submit, and I am advised, which advice I accept as
correct, that the moratorium is illegal, alternatively
unconstitutional
and null and void, alternatively it should be
reviewed and set aside as an ultra vires step on the part of the
second respondent.
3.5
The practical reality, however, is that the staff of the first
respondent has been instructed, on the threat of being discharged,
not to accept any applications for new licenses, applications for new
licences, applications for occasional or catering permits
and / or
applications for the transfer of existing licences.
3.61
have personal knowledge of the staff of the first respondent refusing
to issue me and other consultants with reference numbers
in order to
make payment of the prescribed application fees which is a
prerequisite of the lodgement of applications. The practical
reality
is that it makes the lodgement of an application impossible."
4.
The impact of the alleged legal moratorium is then stated to be that
the restaurant liquor license that had been granted to the
applicants
for its business known as Ottowa Creek Spur had lapsed, which thus
necessitated a new application. It is also alleged
that the applicant
can not get a "catering permit" as a bridging mechanism to
continue trading in liquor in the business
and that it is difficult,
if not impossible, to run a proper Spur business without being able
to sell liquor. If it had not been
for the illegal moratorium, the
applicant would have been able to file an application for a catering
permit. Under the heading
of "urgency" it is stated that
there had been an application before this court in respect of the
validity of the moratorium.
The decision that was however handed down
in that matter did however not resolve the issue of the moratorium,
as the judgement
was based on the issue of urgency.
5.
In this context I was referred to the decision of s B Dunn and Others
v The Gauteng Provincial Liquor Board and Others under
case number
43475/20011. In that case similar relief was sought. Matojane J
delivered a judgment on 29 August 2011 in which he
dismissed the
application on the basis that it was not urgent, and after referring
to what that applicant had stated in his Founding
Affidavit mainly
"as far as I know from personal knowledge, there is a fair
amount of chaos at the office of the second respondent
because of
many pending matters which should have been finalised, many mandamus
orders issued against the second respondent; a
lack of efficient
administrative system etc ..." , held that the urgent relief
sought by applicants in that case would just
exacerbate an already
dysfunctional system of liquor licensing, without giving applicants
any immediate meaningful relief. Applicants
would still suffer the
same loss or damage were the relief sought granted, as they would if
they were to rely solely or substantially
on the normal procedure
provided for in the rules of court. The application was therefore
dismissed on that ground alone.
6.
I will return to the Fortuna Trade application. In the answering
affidavit the chairperson of the Gauteng Liquor Board raised
a number
of issues including three points in limine relating to abuse of
process, urgency and locus standi. He also dealt with
the
respondent's case on the merits, ie the statutory basis for the
moratorium, the process leading to the moratorium and the
justification therefor.
7.
As far as the abuse of process was concerned, he alleged that the
individual applicant was represented by a firm of attorneys,
the
responsible attorney being Mr Marius Blom. This same firm of
attorneys and Mr Blom specifically also acted for the applicants
in
the matter of Dunn to which I have referred. It was pointed out that
materially the relief sought therein was on the same terms
as in the
present application. As I have said, the judgment in the Dunn matter
was delivered on 29 August 2011. Thereafter, on
31 August 2011, the
said Mr Blom addressed a letter to him, which he annexed, which
amongst others stated the following: "
You are aware of the fact
that Judge Matojane for some or other strange reason did not make a
decision on the unlawfulness of the
moratorium imposed by the MEC and
adhered to by the Board. This matter will be going back to court on
20 September 2011".
The following also appears therein:" We
request the Board immediately to instruct its administrative staff to
issue reference
numbers and to accept lodgement of new applications
on the second of September 2011, failing which we hold instructions
on behalf
of a great number of prospective applicants to institute
action as a group action against the Gauteng Provincial Liquor Board
for
damages in respect of damages so suffered.
8.
On the same day the same attorney addressed a letter to various
members of the liquor industry, also referred to the judgment
of
Matojane J and then in paragraph 4 thereof said the following: "The
only way of dealing with this unlawful impasse is to
go back to court
and to get a Judge who is willing to make a decision on the crisp
issue of the legality of the moratorium. On
the 20 September 2011
Judge "X", a senior and highly rated and appreciated Judge
will be sitting in the urgent court.
This Judge has in the past made
strong and brave decisions based on law and nothing but law. He will
not take a political position!".
Members of the industry are
then requested to provide assistance and to "join In" by
contributing towards the costs of
further applications.
9.
The chairperson of the Liquor Board then stated that he found these
comments regarding the Judge who allegedly does not make
political
decisions and the implied attack on Judge Matojane both unfortunate
and unworthy of an officer of the court. It was then
contended that
these letters indicate that the present applicants' attorneys have
engaged in forum-shopping and attempted to select
a judge most
likely, in their view, to grant the application. It was pointed out
that the same attorneys have instituted a second
application, namely
that of Steyn, with which I shall deal hereunder. It was also pointed
out that the present applicant, in the
same way as in the Dunn
application, has not disputed the need for reforms that were being
implemented during the moratorium. Accordingly,
he states the
applicants are attempting to re-litigate the same issue that Matojane
J had already dismissed for lack of urgency.
Instead of enrolling the
matter on the normal motion court roll and seeking the appropriate
relief relating to the so-called merits
of the application, the
application has yet again been brought on an urgent basis. He states
that it is impermissible to re-enrol
on the urgent roll, before the
same court but a different judge, an issue that has been dismissed
for lack of urgency. This constitutes
an abuse of process, which was
aggravated by enrolling as a separate application the virtually
identical application in the Steyn
matter that I have mentioned and
that has been consolidated as stated.
10.
In addition points relating to lack of urgency and locus standi were
raised. As far as urgency is concerned it was contended
that this
application was not urgent for the following reasons:
10.1
The applicant, in fact, submitted a liquor licence on 5 August 2011
prior to the commencement of the moratorium. That application
is
accordingly not subject to the moratorium and is being considered in
the ordinary course, entirely unaffected by the moratorium.
This was
admitted by the applicant in the replying affidavit, who however
stated that it begged the question that the applicant
was not in a
position to apply for catering permits to continue trading. It was
also contended that the applicant did not and could
not reasonably
have complained that there had been an unreasonable delay in
processing his application for a liquor license. His
complaint is
that it is prevented by the moratorium from applying for a catering
permit to act as a "bridging mechanism to
continue trading in
liquor", until the application for a liquor licence is
processed. It was also stated that the respondents
have made
significant progress implementing the reforms that informed the
decision to put the moratorium in place, and have determined
that it
will be possible to uplift the moratorium in respect of
section 31
occasional or catering permits by 31 October 2011. It was then and in
that context submitted that the applicant was not eligible
for a
catering permit in any event having regard to the provisions of
section 31 of the Gauteng
Liquor Act. Section
31 (2), which reads as
follows: "The local committee shall not grant a catering or
occasional permit under subsection(l) unless
the applicant can show
exceptional circumstances that warrant the granting of the catering
or occasional permit for a period not
longer than seven consecutive
days."
Section 31(4)
is also apposite: The local committee shall
be satisfied that the distribution or sale of liquor is not the
principal business
of the applicant, but incidental to the occasion
held by the applicant. In that context it was contended that catering
or occasional
permits were not intended to operate as a "bridging
mechanism for applicants for liquor licenses to operate while their
applications
were pending as if they have already been granted liquor
licenses. These permits were intended, as is apparent from
section
31
, to be available for persons involved in "once-off events"
who require a short term permit not exceeding seven days. In
any
event,
section 31(2)
requires "exceptional circumstances"
and
section 31(4)
is clear in the present context. On applicant's own
version the sale of liquor is indeed part of the principal business
of the
applicant. On his own version it is certainly not incidental
thereto. In the premises it was argued that the application was an
abuse of the process of court, that it was not urgent and that prayer
3 in any event was not competent according to law. The applicant
had
no potential to secure a catering or occasional permit in terms of
Section 31
as it had no standing to institute this application at
all. The applicant's application for a liquor license in terms of
Section 23
of the said Act was submitted before the moratorium
commenced and, accordingly that application was unaffected.
Accordingly, the
applicant had no legal right implicated by the
moratorium and no locus standi to institute this action.
11.
A lengthy summary of the respondents' case on the merits was then
given relating to the justification of the imposition of
the
moratorium. I have considered those reasons and the rationality
thereof and am prima facie of the view that such reasoning
was sound.
It is however not necessary for me in this application to express a
final view thereon and apart from saying that on
a prima facie basis
at the very least the arguments seem rational, I do not deem it
necessary to finally arrive at a decision thereon
for purposes of
these proceedings.
12.
The Steyn application:
In
this application the same relief relating to the unlawfulness of the
moratorium was sought and in prayer 3 the following relief
was
sought:
"An
order authorising me, the applicant, to trade in liquor in a business
to be known as John Dory's and to be situated at
Shop 4, Heritage
Square, corner Cecile Knight and Viljoen Streets, Krugersdorp, as if
a restaurant liquor license has been granted
to me, until such time
as an application for such a license could have been lodged and
processed by the first respondent, on condition
that the same must be
lodged in accordance with the provisions of the Gauteng
Liquor Act on
the first available Friday for lodgement, the requirements for
advertising taken into account, after the order of the honourable
Court declaring the moratorium illegal or unconstitutional, or if
not, after the expiry date of the moratorium."
In
that founding affidavit the applicant submitted that the moratorium
was unconstitutional, unlawful, and invalid, in that it was
contrary
to the provisions of section 22 of the Constitution read with section
33 thereof. It was also contended that the moratorium
of the Liquor
Board was not legislation and was in fact not regulating or limiting
any of his rights, but was in fact simply barring
his right to apply
for and/or obtain a license.
13.
In the answering affidavit the chairperson of the Liquor Board again
referred to the already mentioned in limine points that
I dealt with
in the Fortuna case, namely relating to abuse of process and lack of
urgency. As far as the aspect of lack of urgency
was concerned it was
stated that in summary the relevant facts were that the applicant had
previously held a liquor license which
had lapsed and accordingly
could not be transferred. He now required a new license in respect of
different premises from which
he wished to operate. On that basis the
applicant in fact sought interim relief by way of prayer 3,
effectively allowing him to
operate as if he had a liquor licence.
Also, the moratorium was announced approximately one month before it
took effect on 8 August
2011. The applicant provided no explanation
for why he failed to make use of this mentioned window period. Also,
in the ordinary
course liquor licence applications were in any event
subject to a lengthy and rigorous process, and were not there for the
asking
on a urgent basis. The Gauteng
Liquor Act imposed
a number of
stages and processes before a final decision could be taken by the
Board, including an initial recommendation by a
local committee, the
process of inspection and substantive consideration by the Board.
14.
In argument Mr Rip SC on behalf of the applicants stated that what
was actually before me was a review of the decision of the
relevant
member of the executive committee in terms of section 6 of the
Administrative Justice Act 3 of 2000. He submitted that
the relevant
recommendation and decision was a unilateral suspension of
legislation, and in that context the decision maker had
"crossed
into the field of the legislator". He did not associate himself
with the mentioned letters of 29 July of 2011,
and submitted,
correctly, that the letters and the sentiments expressed therein were
not appropriate. He challenged the basis for
the moratorium on a
number of grounds but, as I have already stated, I am not deciding
these applications on the basis of the invalidity
or otherwise of the
said moratorium.
15.
Mr Marcus SC on behalf of the respondents pointed out that in the
Steyn matter there had been no application. In the Fortuna
matter the
said application on 5 August 2011 was defective in a number of
material respects. In both cases, therefore, no application
had been
or could been considered by the respondents. The Court, whether on
the basis of common law, or relevant legislation including
the
Promotion of Administrative Justice Act, does not lightly substitute
its decision for that of an authority that has been given
responsibility for such in terms of relevant legislation. The
provisions of section 8(1)(c)(ii) were clear, and no exceptional
case
was before me, nor indeed exceptional circumstances referred to in
the Gauteng
Liquor Act. Also
, the same reasoning that found favour
with Matojane J applied and in that context also both of these
applications amounted to an
abuse of the process of Court, and
further amounted to unacceptable "forum shopping". I also
did not lose sight of the
fact that the moratorium was put in place
for reasons that I found prima facie to be rational and I also
considered that it only
applied for a limited six months period, that
only three categories of applications were involved, namely those
that imposed the
greatest administrative and operational burdens, and
that the moratorium in any event only applied to new applications in
these
categories, so as not to prejudice existing applicants.
16.
Mr Marcus also submitted that if I had to find that the moratorium
was unlawful, ultra vires or unconstitutional, I would have
to
consider the provisions of
section 172(1)(b)(ii)
as, it was required
to me to make an order that was just and equitable. In the present
context I would not hold the restructuring
of the Board and all
efforts made in that regard simply be set aside, and that the present
chaos simply continue. I would, in that
context then order that the
nullity of that decision be suspended for a certain period. In that
case, therefore, as a matter of
logic the applicant herein would in
any event not be entitled to urgent relief, having regard to the
state of affairs of the Liquor
Board which was not in dispute. In any
event, it was pointed out that it was not disputed on the affidavits
before me in the Steyn
application that had the moratorium not been
implemented, and if Steyn had lodged an application for a liquor
license mid September
2011, in the ordinary course, the application
would not have been decided before the moratorium ended. Applications
normally take
several months to process and after the moratorium was
lifted, Steyn, like all other applicants, will have the benefit of a
faster
process with greater efficiency and integrity.
17.
In both the mentioned cases it is my view that the reasoning of
Matojane J in the mentioned judgment was sound. I intend following
it. There are also clear indications of a disturbing nature that the
relevant attorneys intend persisting in applications of the
same
nature based largely on the same reasoning before different judges in
different courts. In fact I was informed that another
similar
application had been set down before the urgent court, commencing on
4 October 2011. I am therefore of the following view:
17.1
The relevant moratorium is lawful and rational on a prima facie
basis, although I have not finally decided this as it is unnecessary
for present purposes;
17.2
Neither of the applications is urgent;
17.3
Both applications amount to an abuse of the process of this court and
especially in the context of the Rule and Practice Directions
relating to urgent applications;
17.4
No exceptional circumstances have been shown to exist which would
allow me, either in terms of the Gauteng
Liquor Act, or
the
Administrative Justice Act, to grant "temporary liquor licenses"
, if I may use that phrase in the present context.
18.
As far as the questions of costs were concerned, Mr Marcus argued
that, having regard to all the facts seen cumulatively, I
ought to
order that the applicants' attorney, Mr Blom, pay the cost de bonis
propriis on an attorney and client scale. I have considered
this
argument and, as I have said, the relevant correspondence referred to
is not only highly inappropriate but borders on contempt
of court,
apart from putting undue pressure on me to make a decision on me that
is "not political". On careful consideration
however I do
not deem it appropriate to accede to Mr Marcus's request for the
following reasons:
18.1
I cannot find on the present papers that Mr Blom intended to act
contemptuously;
18.2
He ought to have been granted sufficient opportunity to confront this
request for a special cost order, and to make submissions
to me in
regard thereto;
18.3
The present applications seen in the proper context of the Dunn
application and the application that is to be heard by the
urgent
court next week, however, point to a disturbing trend which I ought
to discourage by making an order that the costs be paid
on an
attorney and own client scale.
19.
Accordingly both applications are dismissed with costs on an attorney
and own client scale including the cost of two counsel.