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2023
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[2023] ZAFSHC 207
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Guddisa v Free State Gambling, Liquor and Tourism Authority and Another (3578/2022) [2023] ZAFSHC 207 (26 May 2023)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: 3578/2022
Reportable:
YES/NO
Of
Interest to other Judges: YES/NO
Circulate
to Magistrates: YES/NO
In
the matter between:
ENDALE
ASEFA GUDDISA
Applicant
and
THE FREE STATE
GAMBLING, LIQUOR AND
TOURISM
AUTHORITY
1
st
Respondent
THE
CHAIRMAN OF THE FREE STATE GAMBLING,
LIQUOR
AND TOURISM AUTHORITY
2
nd
Respondent
CORAM:
LOUBSER, J et RAMDEYAL, AJ
HEARD
ON:
5 MAY
2023
JUDGEMENT
BY:
LOUBSER, J
DELIVERED
ON:
The judgment was handed down electronically
by circulation to the
parties’ legal representatives by email and release to SAFLII
on 26 MAY 2023. The date and time for
hand-down is deemed to be 26
MAY 2023 at 16:00
[1]
This is an application for the review and setting aside of the
respondents’ decision
to refuse the granting of a liquor store
licence to the applicant at the premises on the corner of King Edward
and Ella Street
in Willows, Bloemfontein. The application for review
is brought in terms of the provisions of Section 6 of the Promotion
of Administrative
Justice Act (PAJA)
[1]
and the provisions of Rule 53 of the Uniform Court Rules.
[2]
More specifically, the applicant relies on the following provisions
of Section 6 of PAJA:
“
6(2):
A court or tribunal has the power to judicially review an
administrative
action if—
6(2)(d)
the action was materially influenced by an error of law,
6(2)(e)(vi): the
action was taken arbitrarily or capriciously,
6(2)(f) (ii):
the action itself is not rationally connected to the information
before the administrator.
6(2)(h):
the exercise of the power or the performance of the function
authorised by the
empowering provision, in pursuance of which the
administrative action was purportedly taken, is so unreasonable that
no reasonable
person could have so exercised the power or performed
the function.
6(2)(i)
the action is otherwise unconstitutional or unlawful.”
[3]
The applicant contends that the decision of the respondents was
materially influenced
by an error of law, as they applied regulation
70(1) as an absolute prohibition to the granting of the licence. The
relevant regulations
were promulgated in terms of Section 133(1)(b)
of the Free State Liquor Act (“the Act”) 6 of 2010.
Regulation 70(1)
provides that the premises to which the liquor
licence pertains, may not be situated within a radius of 500 metres
from an institution
of learning or worship. The applicant further
contends that the respondents acted capriciously and arbitrarily
because there was
no evidence that nearby schools would be negatively
affected by the granting of the licence. The respondents also acted
capriciously
and arbitrarily by basing their decision on the fact
that there are other liquor outlets situated in close proximity to
the applicant’s
proposed outlet, while there was no evidence
that the granting of the licence would lead to excessive drinking or
would cause a
nuisance to the surrounding public. In this sense, the
decision was not rationally connected to the information before the
respondents,
the applicant submits.
[4]
The respondents, on the other hand, point out that the applicant has
not complied
with the provisions of Regulation 70(3). Regulation
70(3) provides that where an application will be in contravention of
Regulation
70(1), then the applicant must submit reasons why
Regulation 70(1) should not be followed. This was not done, the
respondents say.
Furthermore, the respondents raised a point in
limine
in their answering affidavit, objecting to the fact
that it was the applicant’s attorney who had deposed to the
founding
affidavit, and not the applicant himself. This amounts to a
testimony on behalf of the applicant, which should not be allowed.
They also dispute the authority of the deponent to institute and
prosecute the application. They contend that on these grounds alone,
the application should be dismissed with costs.
[5]
Firstly, in
ANC
Umvoti Council Caucus and Others v Umvoti Municipality
[2]
it was found that affidavits are not the place to challenge the
authority to depose. Such challenge should be made in terms of
the
procedure provided for in Uniform Rule 7(1). In the present
application Rule 7(1) was never invoked. Secondly, Rule 6(1) provides
that every application must be brought on notice of motion supported
by “an affidavit as to the facts” upon which the
applicant relies for relief. The applicant himself confirmed in a
confirmatory affidavit the authority of the deponent to launch
the
review proceedings, and he furthermore confirmed the contents of the
founding affidavit as far as it related to himself, as
true and
correct. As far as the other facts in the founding affidavit are
concerned, it is clear to this court that the applicant’s
attorney was the person who submitted the application for a licence
on behalf of the applicant, and who communicated with the respondents
throughout the process of the application and who attended to the
queries of the respondents on behalf of the applicant whenever
they
arose. It follows that he was the person who could depose to the
facts of the application in compliance with Rule 6(1), and
not the
applicant himself. Consequently, there is no reason to question the
authority and the competency of the attorney to depose
to the
founding affidavit, and the point in
limine
therefore has no merit.
[6]
The applicant, on the other hand, contended that the answering
affidavit was not properly
commissioned by a commissioner of oaths
and should therefore be ignored in the adjudication of the
application. The attorney representing
the applicant mentions in the
replying affidavit that he found a copy of the answering affidavit on
the court file before the hearing.
On this copy, the signature of the
deponent was not the original signature, while the commissioning of
the affidavit was original.
The attorney contend that, as a result,
it is clear that the affidavit was not signed in front of a
commissioner of oaths. Meanwhile,
the original answering affidavit
has found its way into the papers before the court, and there can be
no doubt that the signatures
on this original affidavit correspond in
every respect with the signatures that appear on the non-original
affidavit. I am therefore
not persuaded that this affidavit was not
signed in the presence of a commissioner of oaths.
[7]
In any event, the requirement of a signature in the presence of a
commissioner of
oaths was held to be not peremptory in a number of
decisions.
[3]
If it appears that the affidavit was not signed in the presence of a
commissioner of oaths, the court has a discretion to
either regard
the affidavit of no value, or to acknowledge the affidavit as a sworn
affidavit. In the circumstances of the present
answering affidavit, I
have no hesitation in accepting it as duly signed and commissioned.
The objection raised in this regard
is rejected.
[8]
I now turn to the merits and the facts of the matter as they
transpire from the affidavits
and the record of the decision making
process filed by the respondents in terms of Rule 53(1). As already
mentioned, the applicant
applied for a liquor store licence at
premises where liquor would only be purchased and not consumed. The
applicant presently has
a restaurant liquor licence for on-site
consumption. The restaurant is situated right next door to the
proposed premises of the
liquor store for which he now seeks a
licence. There are two other outlets for the sale of liquor (off-site
consumption) in the
area, and both are owned by the same person. None
of the existing liquor outlets in the area objected to the granting
of a liquor
store licence to the applicant.
[9]
The two other off-site liquor outlets are respectively 498 and 420
metres away from
the premises where the applicant wants to open his
liquor store. The local municipality did not bother to provide the
respondents
with a report to assist them in considering the
application. The inspector of the 1
st
respondent mentioned
in his report that the building plan of the outlet has not been
approved. The police did submit a report,
in which the granting of
the licence to the applicant was recommended. It is mentioned in the
report that the building plan does
not correspond with the premises
in question. It appears that the issue of the building plan did not
play any role in the decision
of the respondents not to grant the
licence.
[10]
There are three schools situated within a distance of 500 metres from
the proposed outlet. The schools are
not in the same block as the
proposed outlet, and are respectively 415, 450 and 460 metres from
the proposed outlet. None of these
schools have objected to the
granting of the licence. The community members interviewed by the
respondents all supported the application
for a licence.
[11]
After considering the application, the respondents invited the
applicant’s attorney to address them
on the following issues:
The building does not correspond with the submitted building plans,
the proposed premises are in close
proximity to institutions of
learning, there are two similar outlets in the area, and Ella Street
has more than four liquor outlets
and the granting of another liquor
licence might lead to proliferation. Further, section 28(4) of the
Act read together with Regulation
70(1) and (3) indicates that, when
considering an application for registration, the Authority must also
take due regard to issues
of proximity of the proposed premises to
institutions of learning, places of worship and existing outlets.
This invitation was
contained in a letter from the respondents dated
11 March 2022.
[12]
These issues were then addressed by the applicant’s attorney in
an open meeting with the
respondents on 18 May 2022. On 31 May 2022,
however, the respondents informed the attorney by way of a letter
that the application
is refused on the following grounds:
“
1.
The proposed premises are situated in close proximity to places of
amenity, namely,
institutions of learning, Doctor Viljoen Primary
School (450 metres), Louis Botha Technical High School (415 metres)
and Roseview
Primary School (460 metres).
2.
There are similar and existing outlets, Music Kitchen (Sandis/ AB2
Restaurant
(same erf), Tech Café Tavern (30.7 metres), Café
La Scala Restaurant (64.5 metres), Club House Tavern (63.1 metres),
Blue Rooms Tavern (79.2 metres) and Platinum Lounge (410 metres),
Overland Liquor (498) and HO2 Liquor Store (420 metres).
3.
…. you failed to persuade the Board to deviate from Regulation
70(1) and
allow your application notwithstanding non-compliance with
the said sections as well as regulation.”
[13]
Section 28(2) and 28(4) of the Act set out the criteria to be
considered in an application for
a liquor licence. Section 28(2)
provides as follows:
“
(2)
If the application complies with the provisions of the Act, the
Authority must further consider
the application, relating to the
following criteria:
(a)
The applicant's proposed contribution to
combating alcohol abuse, including whether the applicant has
subscribed to any industry
code of conduct approved by the National
Minister as contemplated in section 13(1)(b) of the National Liquor
Act; and
(b)
The extent to which the proposed
registration may materially restrict or promote –
(i)
new entrants to the liquor industry
(ii)
job creation within the liquor industry
(iii)
diversity of ownership within the liquor
industry
(iv)
efficiency of operation of the liquor
industry, or
(v)
competition within the liquor industry.”
[14]
Section 28(4) provides that the Authority must also take due regard
of issues of –
“
(a) public
interest
(b) proximity of
the proposed premises to –
(i) institutions of
learning, or
(ii) places of worship
(iii) existing outlets
(c) the ratio of
population
vis-à-vis
the number of outlets in the
relevant ward,
(d) the report of the
relevant municipality received in terms of section 31, and
(e) the reports, views,
comments and objections contemplated in sections 31(4).”
[15]
Regulation
70(1) provides that the premises may not be situated within a radius
of 500 meters from an institution of learning or
worship. Regulation
70(3) provides that an applicant whose application will be in
contravention of Regulation 70(1), must submit
representations which
specifically indicate the reasons why such non-compliance should be
allowed.
[16]
In his answering affidavit the 2
nd
respondent exposed the
real gravamen of the decision not to grant the licence in question,
by stating the following: “I am
advised that the law as it
currently stands is as set out in Regulation 70. This is what the
respondents considered.”
In this respect the respondents
were clearly wrong in that they were materially influenced by an
error of law. Firstly, they treated
Regulation 70(1) as an absolute
prohibition to the granting of a licence to an outlet that is located
less than
500
metres from an institution of learning. Such an approach could only
lead to absurdities, such as the granting of a licence to
an outlet
that is 503 metres away from a school, but refusing a licence to an
outlet that is 498 metres away from a school.
[17]
Secondly, the regulations fall within the category of subordinate
legislation. It is trite that
subordinate legislation must be created
and enforced within the limits of the empowering statute, in this
case the Act. This means
that any regulations promulgate in terms of
the Act, must be applied consistent with the provisions and the
purpose of the Act.
[4]
In terms of the Act, the Authority must take due regard to,
inter
alia
,
the public interest and the proximity to institutions of learning
when an application is considered. The Act does not refer to
a
distance of 500 metres, and such distance contained in the
regulations must therefore only be regarded as a guideline. It can
never be regarded as creating an absolute prohibition.
[18]
Section 2 of the Act clearly stipulates the purpose of the Act,
namely to reduce the socio-economic
and other costs of alcohol abuse,
and to promote the development of a responsible and sustainable
liquor industry. Consequently,
the regulation must be read in such a
way that these objectives are achieved.
[19]
The finding is therefore inevitable that the respondents have made an
error of law in their interpretation
of Regulation 70(1). The
decision was also made capriciously and arbitrarily on this basis,
since there was no evidence before
the 1
st
respondent that
the relevant schools would be negatively affected by the granting of
a licence.
[20]
As far as the reason that there are similar outlets in the same area,
there was no evidence before
the respondents that the granting of
another licence would encourage excessive drinking. The decision in
this regard must therefore
be considered as speculative only. There
was also no evidence that the granting of the licence would not lead
to healthy competition
in an open market. Certainly, healthy
competition serves the public interest and results in a better
distribution of liquor in
the whole area.
[21]
In the circumstances, the basis for the decision falls within the
confines of PAJA, and it stands
to be reviewed and set aside. I am of
the view that the respondents should be directed to grant the licence
in question, and that
they should be ordered to pay the applicant’s
costs of this review application.
[22]
The following order is made:
1.
The decision of the first respondent to refuse the applicant’s
application
for a bottle store liquor licence, is hereby reviewed and
set aside.
2.
The respondents are directed to grant the licence in question on such
conditions
as they deem appropriate.
3.
The respondents are ordered to pay the applicant’s costs of
this application
for review.
P.
J. LOUBSER, J
I
agree:
T.
RAMDEYAL, AJ
For
the applicant:
Adv.
R. van der Merwe
Instructed
by:
Kobus
Burger Attorneys
Bloemfontein
For
the respondents:
Adv.
L. Bomela
Instructed
by:
Mohobo
Attorneys Inc.
Bloemfontein
/roosthuizen
[1]
Act 3
of 2000
[2]
2010(3)
SA 31 (KZP)
[3]
See for
instance Cape Sheet Metal Works (Pty) Ltd v JJ Calitz Builder (Pty)
Ltd 1981(1) SA 697 (O) at 699 B and the decisions
referred to.
[4]
Singapi
v Maku 1982(2) SA 515 (SE) at 517 D