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2024
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[2024] ZAECMKHC 43
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Vukani Gaming Eastern Cape (Pty) Ltd v Nailing Wen 518 (Pty) Ltd and Others (CA32/2023) [2024] ZAECMKHC 43 (18 April 2024)
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE DIVISION, MAKHANDA)
Reportable
/Not Reportable
CASE
NO: CA 32/2023
In
the matter between:
VUKANI
GAMING EASTERN CAPE (PTY)
LTD
APPELLANT
And
NAILING
WEN 518 (PTY)
LTD
FIRST RESPONDENT
FLAMING
CHERRIES INTERNET LOUNGE
SECOND
RESPONDENT
EASTERN
CAPE GAMBLING &
BETTING
BOARD
THIRD
RESPONDENT
And
CASE
NO. 34/2023
In
the matter between:
VUKANI
GAMING EASTERN CAPE (PTY)
LTD
APPELLANT
And
DEREK
RAYMOND SEEBER N. O.
FIRST RESPONDENT
CHRISTOPHER
EDWARD HESSIAN N.O.
SECOND RESPONDENT
KEITH
GENTS
N.O.
THIRD RESPONDENT
BERNICE
MILLER
N.O.
FOURTH
RESPONDENT
PETER
MILLER N.
O.
FIFTH RESPONDENT
TRIPLE
CHERRIES INTERNET LOUNGE
SIXTH RESPONDENT
EASTERN
CAPE GAMBLING &
SEVENTH
RESPONDENT
BETTING
BOARD
JUDGMENT
Noncembu
J
Introduction
[1] This
is an appeal against the whole judgment and order of Pakati J,
sitting as a court of first instance
at Gqeberha High Court, Eastern
Cape, and delivered on 10 August 2021. In the judgment, the court
a
quo
dismissed with costs an application for an interdict
instituted by the appellant against the respondents to prohibit them
from
operating a gambling business at their premises without a
licence, i.e. illegally. The court
a quo
held that the
appellant had an alternative remedy and had the option of utilising
mechanisms provided for by the National Gambling
Act and/ or bring
the respondents’ illegal gambling activities to the attention
of the SAPS. As such, the court found that
the appellant was not
entitled to a final interdict as it did not meet one of the essential
requirements for a final interdict.
[2] The
aforesaid judgment concerned two applications brought by the
appellant, which applications were argued
simultaneously, as they
pertained to similar facts and with arguments on both matters near
identical.
[3] The
first application (the subject matter under appeal case number CA
32/2021)
[1]
was opposed by the
second respondent (Flaming Cherries Internet Lounge), and the second
application (which forms the subject matter
under appeal case number
CA 34/2021)
[2]
was opposed by
the sixth respondent (Triple Cherries Internet Lounge). Consequently,
the two are the only respondents opposing
the appeal.
[4] For
purposes of this judgment and for ease of reference the opposing
respondents will be referred to
as ‘Flaming Cherries’ and
‘Triple Cherries’ where the context so requires,
otherwise they will collectively
be referred to as ‘the
respondents’. Incidentally, no relief is sought against the
other respondents in the appeal.
[5] The
matter serves before this court with the leave of the court
a
quo
where
the court held that in view of conflicting judgments on the issue
under consideration, there are compelling reasons why the
appeal
should be heard.
[3]
The
grounds of appeal
[6] It
is the appellant’s case that the court
a quo
erred in
finding that the appellant has an appropriate alternative remedy and
should, as a result thereof, be denied a final interdict.
It contends
that the remedies granted by the National and Provincial Gaming
Boards are not remedies available to the appellant.
They are granted
to the National and Provincial Boards by legislation aimed at
empowering the Boards to search premises, seize
equipment with a view
to enable criminal prosecution and not to stop the illegal
activities.
[7] The
appellant further contends that it has no control over any criminal
prosecution, and that neither
of the Acts provide any Board or
Inspector powers to close down any illegal gambling operations, nor
is criminal prosecution aimed
at closure of such illegal operations
other than punishment of those engaging therein. It asserts
therefore, that the court
a quo
should have found that it had
no suitable alternative remedy and granted it the relief it sought in
paragraphs 2 and 3 of the Notice
of Motion.
[8] Specifically,
the appellant seeks the following relief in the appeal, namely that:
8.1 The
appeal be upheld with costs; and
8.2 The
order of the court
a quo
dated 10 August 2021be replaced with
the following order:
(a) That
the respondents, and all persons occupying the unlicensed premises
by, through or on behalf of the
respondents are interdicted and
restrained from:
(i) conducting
any restricted gambling activity, unlawful gambling activity and
engaging in any other conduct
connected with unlawful gambling
activity prohibited by the
National Gambling Act 7 of 2004
and the
Eastern Cape Gambling Act 5 of 1997;
(ii) permitting
or allowing gambling as defined in
section 1
of the
National Gambling
Act 7 of 2004
and the Eastern Cape Gambling Act 5 of 1997, on and
from the premises.
8.3 The
respondents be directed to pay the costs of this application, jointly
and severally, the one paying
the others to be absolved, on the scale
as between attorney and client.
Proceedings
in the court
a quo
[9] As
a point of departure, it is necessary to set out the factual
background to the matter in order to
properly contextualise the
proceedings in the court
a quo
culminating in the judgment and
order sought to be appealed against.
[10]
The
appellant is a duly incorporated company with its principal place of
business situated at 19 Richards Drive, Gallagher Estate,
Gallagher
House, Midrand, Gauteng. It is the holder of a route operator licence
which authorises it to offer for play 1000 Limited
Pay-Out Machines
(LPMs)
[4]
in the Eastern Cape at
sites approved and licensed for this purpose by the Eastern Cape
Gambling and Betting Board (the Provincial
Board).
[11]
As
an incidence of its router licence holder status, it has service
agreements with Pool City Action Bar, a licensed site operator
situated at 24 Newton Street, Newton Park, Port Elizabeth,
[5]
and Hotspot Sports Bar, Westering, a licensed site operator situated
at 10 Townsend Avenue, Westering, Port Elizabeth,
[6]
which both operate the appellant’s LPMs in their premises.
[12]
These
agreements have been made in accordance with the provisions of
s 18
of the
National Gambling Act, which
provides that a site operator may
be linked to a particular route operator, which may keep limited
pay-out machines owned by the
route operator on the site, and make
those machines available for play to members of the public.
[13] The
appellant attached to its founding papers the Standard Premises
Manager Agreements it entered into
with the above-mentioned site
operators.
[7]
In terms of the
aforesaid agreements the appellant is the owner of the LPMs situated
at the site operators’ premises and
the site operators are
liable for payment of 60% of the net profits and dividends to the
appellant.
[14]
The
second respondent in the first matter is Flaming Cherries Internet
Lounge, a partnership purporting to operate as an internet
café
at premises situated at 6 Boshoff Street, Westering, Port Elizabeth
(Gqeberha), Eastern Cape (the alleged illegal premises).
[15]
The
sixth respondent in the second matter is Triple Cherries Internet
Lounge, a partnership business situated at Shop 6, The Mall
on 4
th
Avenue, Alma Street, Newton Park, Port Elizabeth (Gqeberha), Eastern
Cape. It purports to operate an internet café at the
aforementioned premises (the alleged illegal premises).
[16]
The
applicant enlisted the assistance of two investigators, Hennop and
Lowings, to investigate the legality of the businesses and
the
services rendered by the respondents as it suspected that illegal
gambling activities were taking place at the said premises.
[17]
The
investigators visited the alleged illegal premises at different times
on 12 September 2017. Their investigations established
that:
17.1
The
exteriors and the names of the premises depict that they are internet
cafés;
17.2
A
number of computers are available to patrons for use, and, although
internet is accessible on the computers, no patrons were observed
accessing the internet or emails on the computers, as all the patrons
were participating in illegal gaming;
17.3
The
investigators handed over cash to cashiers over a counter protected
by a glass partition, and the cashiers loaded the desired
credits
onto the terminals chosen by the investigators, which credits
corresponded with the amounts paid to the cashiers;
17.4
The
investigators participated in the games at the chosen computer
terminals which displayed on the screen credits equivalent to
the
cash value paid to the cashiers;
17.5
Inputs
on the terminals could only be made via a touch screen;
17.6
The
terminal displays a number of screens where one selects a game to
play and one is required to select the number of credits one
is
willing to bet at a time;
17.7
The
layout and style of the games are similar to games offered at
legitimate gambling establishments and slot machines in licensed
casinos;
17.8
Each
game had a credit display which either increased or decreased as the
player won or lost;
17.9
When
one stops playing, they cash out from the cashier the number of
credits displayed on their screen;
17.10
Videos
and still pictures depicting the premises, the terminals and the
modus operandi explained above were taken by the investigators;
and
17.11
The
investigators were convinced that illegal gaming was taking place at
the premises.
[18]
It
is common cause that the respondents do not possess licences to offer
LPMs for play to members of the public nor do they have
licences to
keep the said LPMs in their premises.
[19] The
respondents denied operating illegal gaming activities in their
premises, contending that their
businesses were operating as internet
cafés. They challenged the appellant’s
locus standi
,
alleging that it does not offer LPMs for play to the public as it was
the site operators who offered this service in terms of
the law, and
the appellant was not authorised by the site operators to launch the
current proceedings. They also contended that
they have never been
investigated by the SAPS or the Gambling Board, and therefore the
appellant had failed to establish that it
has no alternative legal
remedy.
[20]
In
addition to the above, they also alleged that there are disputes of
fact in the matter, in that the veracity of the investigator’s
factual findings were never tested and that the matters should have
been referred for oral evidence.
[21] After
dealing with the cases for both the appellant and the respondents, as
well as the requirements
for a final interdict, the court
a quo
held that the appellant had failed to establish that it has no
suitable alternative remedy. At paragraph 40 of its judgment, the
court stated that the appellant had the option of utilising the
mechanisms provided for by the
National Gambling Act and/or
bring the
respondents’ illegal gambling activities to the attention of
the SAPS.
[22] Having
found as above, the court
a
quo
deemed it unnecessary
to deal with the other issues raised in matter, more specifically,
whether or not the respondents conducted
illegal gaming activities in
their premises. Also notably, the court made no finding with regards
to the
locus standi
of the appellant, or the other
requirements of a final interdict, namely; a clear right and injury
actually committed or reasonably
apprehended.
The
legal framework
[23] Gambling
activity is defined in the National Gambling Act (NGA) as an activity
which involves placing
or accepting a bet or wager in terms of s 4(1)
or making available for play or playing Bingo or other gambling game
in terms of
s 5.
[8]
[24] Section
4(1)(c) and (d) of the NGA stipulates that a person places or accepts
a bet or wager when that
person stakes or accepts a stake of money or
anything of value with one or more persons on any contingency, or
expressly or implicitly
undertakes, promises or agrees to do so.
[25]
Section
5 defines an activity as a gambling game if it is played upon payment
of any consideration, with the chance that the person
playing the
game might become entitled to, or receive a pay-out, and the result
might be determined by the skill of the player,
the element of
chance, or both.
[26]
In
terms of s 8 of the NGA, the conduct of making available gambling,
unless it is licensed, or it is social gambling which is licensed
or,
social gambling permitted in terms of the provincial Act, or an
informal bet, is prohibited.
[27]
Similar
provisions and definitions of gambling are also contained in the
Eastern Cape Gambling Act.
Submissions
[28]
It
is the appellant’s argument that the nature of the machines and
games offered by the respondents is defined as a limited
pay-out
machine (LPM) as it is a gambling machine with a restricted prize,
[9]
where games are played by the staking of a bet and then pushing a
button, which runs the game, and the computer produces a result.
Games played electronically on LPMs involve no skill on the part of
the player, and the outcome is solely dependent on the determination
by the computer at random. It contends therefore, that the
respondents are operating illegal gaming activities as their premises
are not licensed to offer LPMs for play to the public, nor are the
touch screen computers they use authorised by the Gambling Board.
[29]
The
respondents on the other hand, contend that their businesses offer
airtime to clients for use on computers to perform internet
related
activities. They submitted that their businesses comprise of
equipment required to provide internet services to the public.
Such
include personal computers and facsimile facilities. They also have
ADSL lines through Mweb to provide internet services to
all clients
which include the facility to access internet games played through
the internet. On their version, these are typical
games that may be
accessed on a cell phone with internet access.
[30]
As
indicated earlier, the court
a
quo
did not deem it necessary to determine this issue in its judgment,
for the reasons stated therein, perhaps also having to do with
the
fact that it placed much reliance on
Vukani
Gaming (Free State) (Pty) Ltd v Purple Dot Investments 34 (Pty) Ltd
and Others
,
[10]
(
Purple
Dot
)
where a similar approach was adopted.
[31]
I
am of the view, however, that this issue is germane to the various
other issues which were raised in the matter, including the
locus
standi
of the appellant, and therefore a determination in the
regard is apposite. I therefor deal with it below.
Whether
the respondents operated illegal gambling activities in their
premises.
[32]
The
averments made by the appellant’s investigators pertaining to
the lay-out of the premises, the activities and the nature
of the
games accessible at the respondents’ premises, coupled with the
fact that credits increased and decreased as one won
or lost the bet
on the touch screen terminals, lends one to the irresistible
conclusion that the respondents operate illegal gambling
at their
premises. Notably, these averments were not disputed by the
respondents.
[33]
The
sweeping and generalised statements to the effect that the
investigators were not objective, the credibility of their evidence
was not tested, or that there were disputes of facts, without any
substantiation or evidence, cannot avail the respondents. They
did
not dispute that the investigators attended to their premises on the
afore-mentioned date, nor did they challenge their factual
observations except to contend that they do not provide illegal
gambling activities at their premises.
[34]
It
seems to me though, that the respondents are approbating and
reprobating, blowing hot and cold in this regard, because on the
one
hand they maintain that they do not conduct illegal gambling in their
premises, whilst on the other hand they contend that
the appellant’s
investigators acted clandestinely in that they participated in the
illegal gambling, retained the money paid
out to them in winnings and
as such their evidence should not be admissible. This is
impermissible in law.
[35]
Without
more, the fact that the investigators stand in a close relationship
with the appellant does not mean that their evidence
was not
independent. The respondents presented no evidence to suggest any
bias on their part and as mentioned above, presented
no evidence to
gainsay their evidence pertaining to their factual observations,
photos and video evidence.
[36]
In
Room
Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd
[11]
the
court held that a dispute of fact may arise when a respondent denies
all the material allegations made by the various deponents
on the
Appellant’s behalf, and produces or will produce positive
evidence by deponents or witnesses to the contrary. This,
the
respondents have not done in the present matter.
[37]
With
the material aspects of the aforesaid evidence by the investigators
remaining uncontested, and the common cause evidence that
the
respondents do not have the requisite licences to offer LPMs for play
in their premises, the ineluctable conclusion, in my
view, is that
the respondents conducted illegal gambling activities in their
premises.
Locus
Standi
[38]
Although
the court
a
quo
made no finding with regards to the
locus
standi
of the appellant, it referred with approval to the dictum of Hefer AJ
in
Purple
Dot
[12]
where he stated:
“
The
allegations relied upon by the applicant in regards to establishing
locus standi
in the present application, on its own, in view
of the authorities referred to above; do not establish
locus
standi
for purposes of present application. I am namely not
convinced that the National as well as the Provincial legislation
pertaining
to controlling gambling activities were enacted to protect
existing gambling enterprises. On those submissions alone the
applicant
would not have
locus standi
in the present
application. However, although the applicant deals with it under the
heading of the second requisite in regards
to an interdict, namely
injury committed or reasonably apprehended, the impact of the illegal
operations such as those of the second
respondent diminishes the
revenue generated by legal sites. This fact, coupled with the
applicant’s submissions regarding
the
locus standi
of
the applicant, if it be found that the second respondent indeed is
operating an illegal gambling operation at the premises concerned,
will indeed establish
locus standi
for purposes of the present
application.”
[39]
It
must be pointed out, however, that this was in respect of the
interdict requirement of injury actually committed or reasonably
apprehended
.
[40]
The
court in
Purple Dot
, a matter which dealt with similar facts
to the matter
in casu,
found that the applicant had
locus
standi
only on the limited grounds as stated above.
[41]
As
a starting point in this regard, it is perhaps convenient to consider
the basis upon which this point was raised by the respondents.
[42]
In
their answering affidavits, they contend as follows with regards to
the appellant’s
locus
standi
[13]
:
“
10.
The
applicant attaches licenses of site operators to its application
which evidence that it allows the license holder to keep and
expose
for play LPM’s.
11.
I
point out that this is due to the fact that the agreements would
confirm what the exposition of the regulatory framework alludes
to,
namely that the site operators are the actual operators of LPM’s
and the ones who offer gambling. The route operator
by itself does
not and cannot offer gambling to the public.
12.
Under
these circumstances can the Applicant not lay claim that it has locus
standi purely as a supplier of LPM’s to site operators
.
(Own emphasis)
13.
If
any, the site operators would have had to complain before Court about
the alleged unlawful activities of the 2
nd
/ 6
th
Respondent.
14.
Where
this is not its case, it had to disclose to this Court in full
material facts to show that it has
locus standi
as a route
operator to enter into the present type of litigation.
17.
For
the above stated reasons do I point out that the Applicant simply
does not have the requisite
locus standi
in this matter and
that the application be dismissed for this reason alone.”
[43]
It
seems to me that the above contention loses sight of one very
important factor, which is that the regulatory framework referred
to
provides that site operators can only operate LPMs through licensed
route operators and not on their own, as its only independent
site
operators that can operate LPMs on their own.
[44]
As
evidenced from its founding papers, with that insight in mind, the
case for the appellant in this regard was not that it operates
or
offers LPMs for play on its own, but that it has entered into service
agreements with the site operators which have, through
the appellant,
obtained site operator licenses in the regard, to operate the LPMs on
its behalf.
[45]
To
that end, it attached the aforesaid agreements to its founding
papers, indicating,
inter alia
, that it had a larger stake in
the operation of the LPMs because the site operators only receive 40%
of the net profits, and that
it remains the owner of the LPMs.
[46]
The
contention therefore, that the appellant needed the authority of its
site operators to lodge the current application is untenable.
[47]
In
Vukani
Gaming Gauteng (Pty) Ltd v Parelio Foods
and two similar matters,
[14]
a
matter dealing with facts and issues almost identical to the matter
in
casu,
the court per Teffo J, found that the applicant had the requisite
locus
standi
.
[48]
In
Vukani
Gaming Gauteng (Pty) Ltd and Others v KKK Properties and
Others
[15]
the
court held:
“
The
applicants have a right to the protection of gambling revenue which
is affected by the illegal gambling activities of the second
respondent. Any other operator, especially an operator without a
licence issued by the third respondent competes unfairly with
the
applicants for revenue derived from gambling activities. The
applicants have thereby been harmed by the first and second
respondent
in their business. There is no any other remedy available
to the applicants other than to interdict the conduct of the first
and
second respondents. This is more so that the unlawful activities
are ongoing.”
[49]
The
appellant alleged that it went through lengthy legitimate
applications and probity at significant expense. It pays licenses
and
gambling fees, as well as other taxes, as required by legislation.
The respondents followed no such processes and pay no license
and
gambling fees to the gambling authorities for the amounts they earn
as a result of their operations. The submission is that
the ongoing
unlawful conduct, which has been criminalised, is injurious by its
nature and constitutes continuing harm, not only
to the appellant’s
rights and interests, but also the public interest which gambling
legislation seeks to protect.
[50]
The
submission goes further to state that, given that people attend on
the respondents’ premises solely in order to gamble,
it is
reasonable to assume that, but for the other opportunities offered
for illegal gambling by the respondents, persons wishing
to gamble
would do so at legal outlets such as the appellant’s. This is
more so given the fact that the illegal premises
are situated within
the catchment areas of the appellant’s legal sites. The impact
of illegal operations do not merely diminish
the revenue generated by
legal sites, but have the potential to cause the loss of capital
investments made in legal gaming.
[51]
I
agree with these submissions. Given what has been stated above, I am
persuaded that the conduct of the respondents in operating
the
illegal gambling activities at their premises, have caused special
damage to the appellant as a licensed route operator, as
such the
appellant has met the requirements for
locus
standi
as set out in
Patz
v Greene and Company,
[16]
as there can be no question in my view, that their conduct amounts to
unlawful competition.
[52]
Dealing
with this issue in
Siqalo
Foods (Pty) Ltd v Clover SA (Pty)Ltd
[17]
,the
Supreme Court of Appeal made the following remarks:
“
It
does not appear to be in dispute that
if
the appellant trades in contravention of a statutory prohibition,
such trade would also constitute an actionable wrong under
the common
law, namely unlawful competition
[18]
(which is actionable even if the misrepresentation is innocent).
[19]
On appeal, the appellant appears to have accepted that if it is found
to trade in contravention of the statutory prohibitions,
then the
respondent has proven unlawful competition and that the court
a
quo
was correct in so finding.” (own emphasis)
[53]
On
the strength of the above authorities therefore, I am of the view
that the appellant is well suited to bring the application
in
casu.
Requirements
for a final interdict
[54]
With
the above finding extant, and the reasons relied upon therefore, it
follows in my view, that the appellant did establish the
requirements
of a clear right and an injury actually committed or reasonably
apprehended in respect of the final relief it sought
in the matter.
The only remaining issue for determination is whether or not the
court
a quo
was correct in finding that it has a suitable
alternative legal remedy available to it.
[55]
In
this regard, the court
a quo
relied on
Purple Dot
and
the authorities referred to therein which found in similar
circumstances, that where an option of a criminal prosecution and
sanction was available to an aggrieved party, it could not be said
that the aggrieved party did not have an alternative legal remedy.
[56]
In
the
KKK
Properties
matter,
[20]
in dealing with a
similar issue, the court found that the appellant did not have a
suitable alternative remedy where the appellant
had opted for an
interdict instead of the mechanisms provided for in the NGA and
provincial Gambling Acts. The appeal court accordingly
confirmed the
granting of an interdict by the court
a
quo
.
Referring to this matter, the court
a
quo
in the matter
in
casu
,
held that
KKK
Properties
was
distinguishable in that the illegal conduct there had on previous
occasions been reported to the Board, which took no steps
to deal
with the matter.
[57]
Notably
however, the submissions of the appellant in this regard in the
present matter were that it had reported the matter to the
Provincial
Board, as well as the respondents themselves, requesting them to
desist from the illegal conduct. No reaction was yielded
by the
letters sent to the two in this regard. It would seem to me from the
judgment therefore, that the court
a quo
took issue with the
fact that the said conduct was not reported to the National Board by
the appellant.
[58]
The
main criticism levelled against the appellant, so it seems, laid on
its failure to report the matter to the SAPS, where the
legal
framework in this regard provides mechanisms to deal with the
problem, up to setting down severe criminal sanctions.
[59]
The
available legal authorities in this regard point to the view that the
court
a quo
may have erred. The
Purple Dot
matter,
which the court
a quo
followed in this regard, made the error
of incorrectly distinguishing the
KKK Properties
matter solely
on the basis that previous reports had been made to the Board in the
latter matter. It would appear that the court
a quo
fell into
the similar trap.
[60]
The
aspect of the report to the Board was mentioned in
obiter
by
the court in
KKK Properties
. At paragraph 33 the court made
the following remarks:
“
It
has already been stated above that the third respondent has limited
resources to enforce the Gauteng Act and monitor illegal
gambling
activities. This is evidenced by the non-responsiveness of the third
respondent to the correspondence of the applicants
as far back as
2011 to act on the activities of unlicensed players.”
[61]
From
the above passage it seems to me that what the court was highlighting
here was that the Provincial Board had limited resources
to monitor
illegal gambling activities and to enforce the Provincial Act. The
emphasis was not on the fact that because the conduct
had previously
been reported, it meant that the applicant had no alternative legal
remedy. It is also relevant that in this same
matter nowhere is it
stated that the illegal activities were ever reported to the SAPS.
[62]
Quite
ironically, the argument that was raised in
KKK Properties
is
the same argument raised by the appellant in the present matter,
namely, that the respondents’ conduct was reported to
the
Provincial Board which yielded no reaction because,
inter alia
,
it does not have enough resources. Similar to the present matter, the
illegal conduct in
KKK Properties
was never reported to the
police.
[63]
It
appears that the court in
Purple Dot
took the
obiter
remarks of the court in
KKK Properties
as the
ratio
for
its decision on the absence of an alternative legal remedy, when in
actual fact, and as clearly demonstrated in the passage
above, that
was not the case. In this regard therefore, no doubt the
Purple
Dot
matter was wrongly decided.
[64]
Mr
Ellis, on behalf of the appellant submitted the following on this
issue:
64.1
The
remedies granted by the National and Provincial Gambling Acts are not
remedies available to the appellant.
64.2
The
remedies granted to the National and Provincial Boards by legislation
which are aimed at empowering the said Boards to search
premises and
seize equipment with a view to enable a criminal prosecution and not
to stop such illegal activities.
64.3
The
appellant has no control over any criminal prosecution.
64.4
Neither
of the Acts provide that any Board or inspector may close down an
illegal gambling operation and therefore no remedy similar
to an
interdict is available to the appellant under these Acts.
64.5
Criminal
proceedings are not aimed at closure of illegal gambling operations,
but the punishment of those engaging therein.
[65]
In
line with the
stare
decisis
principle, Mr Ellis urged this court to follow the decisions in
Parelio
Foods
[21]
and
the Full Court in
Vukani
Gaming Gauteng (Pty) Ltd v Royal Internet Café
,
[22]
in
dealing with available alternative remedies. The above decisions, in
dealing with similar circumstances, found that the remedies
available
in terms of the Gambling legislation were not remedies that are
equally or more effective to the one provided by an interdict,
and
the fact that the offending conduct might constitute a criminal
offence did not accord to the applicant having similar protection
to
that sought by way of interdict proceedings. Accordingly, the courts
in both these decisions held that the applicants did not
have an
alternative legal remedy.
[66]
Further
authority in this regard is found in
Siqalo
Foods v Clover SA
[23]
where
the Supreme Court of Appeal stated the following:
“
The
appellant contends that the respondent had available to it an
alternative remedy under the Act which, so the contention goes,
should have been pursued instead of this application. On that score,
s 3 of the Act, which states that the Minister may ‘prohibit
the sale of a prescribed product’, has been invoked.
[24]
However, why it is thought that s 3, which does no more than empower
the Minister to take steps to ensure compliance with the Act,
would
avail the respondent in the present circumstances is far from clear.
…
In
any event, s 3 of the Act falls far short of affording the respondent
the remedy sought in this application, namely to interdict
and
restrain the appellant’s continuing unlawful conduct. As
observed in
Milestone
Beverage CC and Others v The Scotch Whisky Association and Others
[25]
(
Milestone
)
(citing with approval the judgment of Trollip J in
Johannesburg
City Council v Knoetze and Sons
[26]
):
‘
.
. . [T]he purpose of an interdict is to restrain future or continuing
breaches of a statute, whereas the statutory remedy of prosecuting
and punishing an offender relates to past breaches. Different
considerations must therefore inevitably apply. For, while the
statutory
remedies might be adequate to deal with past breaches, the
civil remedy of an interdict might be the only effective means of
coping
with future or continuing breaches.’
[27]
The
respondent’s case is that the Act and the Regulations make no
provision for any form of relief even remotely similar to
an
interdict to restrain continuing unlawful competition in the form of
trade in contravention of a statutory prohibition. But,
even if there
was a statutory remedy that could be invoked to address the unlawful
competition (and there appears to be none),
then applying the dictum
in
Milestone
, there is nothing that prevents the respondent
from seeking an interdict in the high court. Nothing, therefore,
precluded the respondent
from seeking the remedy of an interdict for
alleged trade in transgression of a statutory provision and,
therefore, unlawful competition
in the court
a quo
.”
[67]
These
authorities, in my view, settle the matter once and for all. The
remedies provided in terms of the National and Provincial
Gambling
Acts are aimed at dealing with past transgressions as their object is
the punishment of those who engage in illegal gaming
activities. They
do not avail the appellant in addressing the ongoing and future
unlawful conduct of the respondents. The only
remedy that can avail
the appellant in this regard is an interdict. The court
a quo
therefore, erred in finding that the appellant had a suitable and
better alternative remedy available to it.
[68]
Under
these circumstances therefore, the appeal must be upheld.
Costs
[69]
I
am not persuaded that an attorney and client scale of costs is
warranted in the matter. In my view, the appellant as the successful
party, is entitled to its costs, but such are to be on a party and
party scale, including the costs of two counsel.
Order
[70]
Accordingly,
the following order is made:
70.1 The
appeal is upheld with costs; and
70.2 The
order of the court
a quo
dated 10 August 2021is replaced with
the following order:
(a) The
respondents, and all persons occupying the unlicensed premises by,
through or on behalf of the respondents
are interdicted and
restrained from:
(i) conducting
any restricted gambling activity, unlawful gambling activity and
engaging in any other conduct
connected with unlawful gambling
activity prohibited by the
National Gambling Act 7 of 2004
and the
Eastern Cape Gambling Act 5 of 1997;
(ii) permitting
or allowing gambling as defined in
section 1
of the
National Gambling
Act 7 of 2004
and the Eastern Cape Gambling Act 5 of 1997, on and
from the premises.
70.3 The
respondents are directed to pay the costs of this application,
jointly and severally, the one paying
the others to be absolved, on a
party and party scale, including the costs of two counsel. The
costs of Senior Counsel to
be classed in accordance with scale C
provided in Rule 69(7) of the Uniform Rules of Court, and those of
junior counsel in accordance
with scale A.
V
P NONCEMBU
JUDGE
OF THE HIGH COURT
I
agree
J
EKSTEEN
JUDGE
OF THE HIGH COURT
I
agree
R
KRUGER
ACTING
JUDGE OF THE HIGH COURT
APPEARANCES
Counsel
for the Appellant:
P Ellis SC (
with
A P Ellis)
Instructed
by:
PDR Attorneys Inc
C/O McCallum Attornes
Makhanda
Counsel
for the Respondents:
N Jagga
Instructed
by:
Vardakos Attorneys
C/O
Carinus Jagga Inc
Makhanda
Date
of hearing
29 January 2024
Date
judgment delivered
18 April 2024
[1]
The
Flaming Cherries matter.
[2]
The
Triple Cherries matter.
[3]
Section
17 (1) (a) (ii) Superior Courts Act, (Act 10 of 2013).
[4]
Defined
in s 1 of the Eastern Cape Gambling Act (Act 5 of 1997),
(hereinafter referred to as the Eastern Cape Gambling Act) as
a
gambling machine outside of a casino in respect of the playing of
which the stakes and prizes are limited as prescribed by
regulations
made in terms of the
National Gambling Act (Act
7 of 2004),
hereinafter referred to as the
National Gambling Act).
>
[5]
Approximately
260 meters from Triple Cherries (sixth respondent’s premises).
[6]
Approximately
980 meters from Flaming Cherries Internet Lounge (second
respondent’s premises)
[7]
Annexures
“R” to the founding papers.
[8]
Section
3 of the Act.
[9]
Section
1 read with section 26 of the NGA.
[10]
Case no. 1064/18 Free State Division (delivered on 20 September
2018).
[11]
1949
(3) SA 1155
(T) at 1163.
[12]
Vukani
Gaming Free State v Purple Dot Investments
(Case no. 1064/18) Free State Division (delivered on 20 September
2018)
at
para 20.
[13]
Paragraphs
10, 11,12, 13, 14 and 17 in respect of both applications.
[14]
Gauteng
case no. 45388/2017; 59406/2017 and 67429/2017, delivered on 4 March
2020.
[15]
(
87975/2015)
[2016] ZAGPPHC 482 (21 June 2016), at paras 29-30.
[16]
1907
TS 427.
[17]
(425/2022)
[2023] ZASCA 82
(31 May 2023).
[18]
Patz v
Greene & Co
1907 TS 427
;
Pexmart
CC and Others v H Mocke Construction (Pty) Ltd and Another
[2018]
ZASCA 175
;
[2019] 1 All SA 335
(SCA);
2019 (3) SA 117
(SCA) paras 62
and 63(a);
Schultz
v Butt
[1986] ZASCA 47
;
[1986]
2 All SA 403
(A);
1986 (3) SA 667
(A) at 678F-H;
Long
John International Ltd v Stellenbosch Wine Trust (Pty) Ltd
1990
(4) SA 136
(D) at 143G-I;
Milestone
Beverage CC and Others v The Scotch Whisky Association and Others
[2020]
ZASCA 105
;
[2020] 4 All SA 335
(SCA);
2021 (2) SA 413
(SCA) para 16
(
Milestone
).
[19]
Elida
Gibbs (Pty) Ltd v Colgate-Palmolive (Pty) Ltd (1)
[1988]
4 All SA 68
(W);
1988 (2) SA 350
(W) at 358F-359A: ‘[w]here,
however, a misstatement of fact relates to a fundamental or
intrinsic quality of the wares
to be sold, thereby providing the
advertiser with a competitive advantage, a plaintiff should not be
non-suited merely because
the deception was innocent’.
[20]
Supra.
[21]
Supra.
[22]
Unreported decision in
Gauteng
Case no. A511/2017.
[23]
Supra.
[24]
Section 3(1) provides that the Minister may prohibit the sale of a
prescribed product unless that product is sold according to
the
prescribed class or grade; unless that product complies with the
prescribed standards regarding the quality thereof, or a
class or
grade thereof; unless the prescribed requirements in connection with
the management control system, packaging, marking
and labelling of
that product are complied with; if that product contains a
prescribed prohibited substance or does not contain
a prescribed
substance; and unless that product is packed, marked and labelled in
the prescribed manner or with the prescribed
particulars.
[25]
Milestone
fn 21
above.
[26]
Johannesburg
City Council v Knoetze and Sons
1969
(2) SA 148
(W) at 150-155.
[27]
Milestone
fn 21
above para 53.