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[2019] ZAFSHC 260
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Vukani Gaming (Pty) Limited v Pillay and Others (A339/2017) [2019] ZAFSHC 260 (5 December 2019)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: A339/2017
In
the matter between:
VUKANI
GAMING (PTY)
LIMITED
Applicant
and
MR
D PILLAY, THE CHAIRPERSON,
FREE
STATE GAMBLING,
LIQUOR
AND TOURISM
AUTHORITY.
1
st
Respondent
MR
K DICHABE, THE CHIEF EXECUTIVE OFFICER,
FREE
STATE GAMBLING,
LIQUOR
AND TOURISM
AUTHORITY
2
nd
Respondent
FREE
STATE GAMBLING,
LIQUOR
AND TOURISM
AUTHORITY
3
rd
Respondent
RESTIVOX
(PTY)
LTD.
4
th
Respondent
THE
MEMBER OF THE EXECUTIVE COUNCIL
DEPARTMENT
OF ECONOMIC,
SMALL
BUSINESS DEVELOPMENT, TOURISM
AND
ENVIRONMENT AFFAIRS, FREE
STATE.
5
th
Respondent
THE
ENTITIES LISTED IN ANNEXURE A TO
6
th
to 56
th
Respondents
THE
NOTICE OF MOTION.
CORAM:
JORDAAN,
J
et
NAIDOO, J
HEARD
ON:
18 NOVEMBER 2019
JUDGMENT
BY:
JORDAAN,
J
DELIVERED
ON:
05 DECEMBER
2019
[1]
The applicant (Vukani) is the holder of a route operator gambling
license issued by the Free State Gambling Liquor and Tourism
Authority (the Authority), the third respondent. The first respondent
is the chairperson and the second respondent the CEO of the
Authority
respectively. The fourth respondent (Restivox) has been granted a
similar license by the Authority. The fifth respondent
is the MEC of
the responsible provincial department. The sixth to fiftysixth
respondents are the holders of site operator licenses
related to the
route operator license of Restivox.
[2]
The first, second and third respondent’s interest in this
matter coincide and they make common cause. I will refer to
them
collectively as the Authority or the Board.
[3]
The applicant applies for the review and setting aside of the Board’s
decision to grant the route operator license to
Restivox. The
application is opposed by the latter and the Authority.
A.
BACKGROUND HISTORY.
[4]
Following upon an invitation by the Authority for applications for a
route operator license in 2011, Restivox applied but the
application
was refused in December 2013. Restivox then applied for review of the
refusal. The application was settled on the basis
that the refusal is
set aside and the application for the licence referred back to the
authority for reconsideration. After reconsideration,
the licence was
granted to Restivox, notwithstanding objections raised by Vukani.
[5]
Vukani then launched a review application which was upheld in
December 2016 and the matter referred back for reconsideration
after
following a proper public participation process. Restivox’s
application for leave to appeal was refused.
[6]
Restivox then informed the Authority of certain amendments to its
application, by means of a letter addressed to the Authority.
These
amendments sought to address the objections raised by Vukani prior to
the first granting of the licence to Restivox and again
raised in the
successful review application of Vukani.
[7]
The authority then re-advertised the “amended application”
which was open for inspection and perusal prior to the
date published
for a public hearing.
[8]
Vukani again objected, in essence raising the same objections as
before. In addition it objected to the amendments being sought
without a prior application for amendment and prior approval by the
Board.
[9]
In the meantime the Authority sought and obtained a full report on
the investigation of Restivox’s application and the
changes
brought about by the amendments, from an independent investigative
entity, Gobodo Forensic and Investigative Accounting
(Gobodo). The
first report apparently dated 30 January 2017 was supplemented by
further reports dealing with the amendments purportedly
brought about
by Restivox. I will deal with these reports more fully later.
[10]
The application and amendments and the objections raised by Vukani
were dealt with in a public hearing held on 20 April 2017.
In a
subsequent meeting of the Board, held on 31 May 2017, the latter
approved the amended application and granted the licence
to
Restivox.
[11]
Vukani then sought information and the reasons for the decision in
terms of the Promotion of Administrative Justice Act, 3
of 2000
(PAJA). Being dissatisfied with the Authority’s response,
Vukani launched an application in terms of PAJA. It was
opposed by
the Authority and Restivox was joined. The application was resolved
by an order agreed to by all the parties, specifying
which further
information should be provided.
[12]
In the meantime, because of time limits for launching of review
proceedings, Vukani issued yet another application for review,
the
one serving before us for consideration. After the Authority filed a
record of the proceedings, Vukani filed a supplementary
founding
affidavit in July 2018. Restivox filed its opposing affidavits to
which Vukani replied. The Authority only filed its opposing
affidavits, with an application for condonation on 1 February 2019.
On 3 April 2019 Vukani filed opposing affidavits to the condonation
application and on 1 August 2019 filed an application for condonation
of the late filing of the aforesaid opposing affidavits.
The
Authority filed opposing affidavits to the latter condonation
application as well as replying affidavits to its own condonation
application. Vukani then filed replying affidavits to its own
condonation application. Vukani also applied for the joinder of site
operator license holders.
[13]
Vukani also brought an application to compel the Authority to
supplement the record by providing all the Gobodo reports as
well as
the minutes of the board meeting of 31 May 2017. An order compelling
the supplementing of the record was granted by agreement.
The costs
of the application as well as the costs of the application in terms
of PAJA stood over for later adjudication, by agreement.
B.
THE ISSUES TO BE DECIDED
[14]
We are called upon to decide the following main issues:
(a) the condonation
application of the Authority;
(b) the condonation
application of Vukani;
(c) Restivox’s
application to strike out hearsay evidence in Vukani’s
supplementary founding affidavit;
(d) the costs of Vukani’s
application in terms of PAJA and its application to compel, and
(e) the merits of the
review application.
C.
THE CONDONATION APPLICATIONS
[15]
At the commencement of the proceedings we indicated that, in our
view, it would be in the interest of justice to allow both
condonation applications so that all relevant information serve
before us. None of the parties objected thereto. I am therefore
satisfied that both applications for condonation should be granted,
the applicant in each of those applications to bear the costs
thereof.
D.
THE APPLICATION TO STRIKE OUT
[16]
This application concerns paragraphs 8.3 up to 8.10 of Vukani’s
supplementary founding affidavit.
[17]
It is alleged that an ex-employee of the Authority approached the
deponent of Vukani’s founding affidavits and tendered
to
divulge certain information on condition that he remains anonymous.
This allegedly happened during the later part of 2017. It
was then
arranged that the witness consult with Vukani’s attorney, Ms
Brand in Cape Town. The witness met with her on 31
August 2017 and
she kept notes of the conversation. The information gained from the
witness was thus available more than two months
prior to the issue of
the review application on 20 November 2017. It was however not
mentioned in the initial founding affidavit
but only in the
supplementary founding affidavit where the aforesaid paragraphs
mention some of the information allegedly obtained
from the witness.
The full version (of which some parts were blocked out) as contained
in the attorney’s hand-written notes
was annexed to Vukani’s
eventual replying affidavits.
[18]
The witness was allegedly later again approached for consent to
divulge his identity but he indicated that he has in the meantime
obtained contract work for the Authority and would be prejudiced if
his identity became known.
[19]
On behalf of Vukani it was argued that the hearsay evidence should be
admitted. It was argued that some parts of his allegations
has been
shown to be correct and is substantiated by the evidence. It is
therefore sufficiently reliable and truthful, so it was
argued.
[20]
The witness is clearly still alive and available. At the time when he
volunteered the information he was not in the employ
of the Authority
and only later became involved in contract work for the latter again.
It is not explained why the witness deemed
it necessary to approach
the deponent for Vukani to tender information. It is unknown how it
came about that his employment with
the Authority was terminated. We
do not know whether he resigned or was dismissed. If he was
dismissed, he might have had a motive
to discredit the Authority.
[21]
When reading the notes made by the attorney, quite a number of
concerns regarding the reliability, objectivity and credibility
of
the witness arise:
(a)
According to him
there “appeared” to be some relationship between the
first respondent, some board members and Restivox.
-He is however not sure
which board members.
(b)
The board arrived
at decisions after “apparent consultations”.
-The facts underlying
his conclusion are unknown.
(c)
When Restivox’s
review application was settled out of court, he realised that there
was a relationship.
-Why that fact leads to
the conclusion that there was a relationship remains unexplained.
(d)
According to him,
M Naidoo of Restivox “would see” the first respondent at
his offices as CEO of The Tourism Authority
and it was common for the
former to raise issues with the latter.
-How he came to know
about what happens at the offices of Tourism, when that happened and
whether he was present is unknown.
(e)
At meetings of the
board, applications were not properly interrogated and specific
submissions not dealt with.
-Whether he was present
at such meetings or whether it represents his own conclusions remain
unknown.
(f)
He “doesn’t
think” board members were given copies of Vukani’s
submissions prior to the public hearing.
-He obviously does not
know.
(g)
He is of the
opinion that draft minutes of meetings can be easily fabricated.
According to him meetings are always recorded and
he will find out
whether such recordings exist.
-If he was present at
meetings he would have known whether recordings were made and would
have known that such recordings existed.
It would not be necessary to
find out.
(h)
The authority
allegedly continued to process site operator licenses because they
were persuaded to do that by Restivox. That, according
to him, shows
that there was communication between the latter and board members.
-This obviously reflects
his own conclusion, unsupported by any factual evidence.
(i)
According to him
the Authority granted the licence to Restivox because “they
wanted a one horse race”.
-That is obviously his
own untenable conclusion controverted by the fact that Vukani was
already licensed and the granting of the
licence to Restivox resulted
in a “two horse race”.
[22]
The aforesaid and the reading of the attorney’s notes as a
whole casts serious doubt on the objectivity and reliability
of the
witness’s perceptions and (sometimes unfounded) conclusions.
That, in conjunction with the witness’s unexplained
desire to
approach Vukani and tender “information” out of his own,
even going to the trouble of attending a consultation
in Cape Town
creates serious suspicion of bias in favour of Vukani.
[23]
To allow the hearsay evidence in these circumstances is highly
prejudicial to Restivox, more so where the evidence was available
when the initial founding affidavit was made, only excerpts were
mentioned in the supplementary affidavit and the full version
only
made available in reply. I am not persuaded that the evidence should
be admitted in our discretion. The application to strike
out should
therefore be granted.
E.
COSTS THAT STOOD OVER
[24]
The application in terms of PAJA followed upon various requests and
attempts to obtain the necessary information from the Authority,
which remained unattended to for long periods. Although the eventual
order was granted by agreement, the application was in essence
successful. The same applies to the application to compel the
supplementing of the record. Both were essentially successful. There
is no reason why the successful applicant should not be awarded its
costs.
F.
THE REVIEW
[25]
In the judgement which gave rise to the reconsideration of the
application, the court found that, when the licence was granted
to
Restivox, seven directors had resigned, unknown to the Authority. It
was accepted that the changes were material and the question
arose as
to whether those changes necessitated further public scrutiny.
[26]
The court found that, after Vukani raised important concerns, it was
entitled to be apprised of Restivox’s response thereto.
The
court found that the Board allowed crucial amendments to Restivox’s
application but failed to subject the process to
a further public
participation process. It found that the decision to grant a licence
was taken at the time when the Authority
was not informed of the
resignation of the seven directors, which impacted on the Board’s
ability to consider whether Restivox
still possessed of the necessary
appropriate knowledge, expertise and experience to operate the
business.
[27]
The decision was therefore set aside and referred back, directing the
Authority to follow an appropriate public hearing process.
[28]
As previously mentioned, Restivox informed the Authority of the
changes and a public hearing was held during which Vukani again
raised essentially the same objections. These objections were fully
debated at the public hearing.
G.THE
GOBODO REPORTS
[29]
As aforesaid, following upon the judgement delivered on 8 December
2016, the Authority sought an independent investigation
in respect of
the objections raised by Vukani. The first report obtained was dated
30 January 2017. Upon the amendments sought
by Restivox, a
supplementary report was sought and obtained, dated 10 May 2017 and
titled “Final Supplementary Report”.
Three further
reports were included in the court papers namely a supplementary
report dated 17 May 2017, a supplementary report
dated 31 May 2017
and a final supplementary report dated 7 June 2017. The contention by
Mr Torres of Gobodo that there were only
three reports can, in view
of the objective evidence, not be correct.
[30]
Mr Farlam who appeared for Vukani pointed out some differences
between the reports dated 31 May and 7 June and submitted that
the
report dated 7 June was obviously not available to the Board when it
took the decision to grant a licence. It is however common
cause that
the report dated 10 May is identical to the report of 7 June. From
the notes of the proceedings of the board on 31 May
2017 it appears
that the report then considered was the report dated 10 May.
[31]
The reliability and veracity of the notes of the proceedings are
questioned by Vukani on the basis of a suspicion that it was
drafted
later and do not appear to represent a shorthand rendition of the
meeting. Furthermore it was pointed out that the notes
were not
signed and certified as correct. In the notes it is recorded that Mr
Torres who presented and explained the report indicated
that the
report was mistakenly dated 10 May. To include such an insignificant
remark in the recordal of the meeting as a fabricated
afterthought is
highly improbable. The inclusion of that gives credence to the notes
and negates the suspicion of it being tailored
to suit the Board.
Whether the notes are compatible to a rendition of shorthand notes is
unknown and speculative.
[32]
The fact that the notes are not certified and signed may be contrary
to statutory prescripts but that fact does not necessarily
preclude
the court from having regard to it. According to its contents, it
refers to various issues that were investigated and
the results of
the investigations, most of which were directed at the complaints
raised by Vukani. The content of the notes gives
some reassurance as
to its reliability and credibility. It therefore has to be accepted
that it was the report dated 10 May 2017
that was discussed and dealt
with at the meeting of 31 May 2017. Since that report is identical to
the report of 7 June 2017, there
can be no mention of relevant
considerations flowing from the 7 June report not having been taken
into account. What is more, the
slight differences in the reports as
pointed out by Vukani are not material at all. All the reports come
to the same conclusion
in respect of all the aspects investigated.
H.
BIAS
[33]
The reliance on a reasonable suspicion of bias is largely founded on
the inadmissible hearsay evidence containing the anonymous
witness’s
suspicions and conclusions. As dealt with before, there are stronger
indications of bias on the side of that witness.
[34]
The board sought an independent investigation of the objections
raised by Vukani. The results of such investigations were unknown
beforehand and could go either way, in favour or against Restivox.
There was a real risk of results unfavourable to the latter.
If the
Authority was biased, it could easily have avoided that the risk by
not reverting to an independent investigation. The fact
that they
have sought such an investigation belies to the suspicion of bias.
[35]
Insofar as the suspicion of bias is founded upon the laxity of the
Authority to respond to legitimate requests by Vukani, it
is highly
speculative and based on conjecture. Laxity does not necessarily
equate to bias.
I.
THE PREVIOUS OBJECTIONS
[36]
The previous objections were again raised and rehashed in the present
application. All those were investigated and reported
on in the
Gobodo reports. The objections were fully discussed and argued in the
public meeting. The report of 10 May was dealt
with and explained in
the Board meeting of 31 May 2017. I will deal with that again
later in this judgement.
J.
AMENDMENTS
[37]
Vukani takes issue with the fact that the amendments sought by
Restivox were not separately applied for and approved prior
to the
consideration of the amended application on 31 May 2017. That is
factually correct but not of any material importance. The
amendments
were fully canvassed and discussed during the public hearing and also
dealt with in the Board meeting on 31 May. The
amendments formed part
of the consideration and were approved.
K.
THE PRESUMPTION IN SECT.5(3)
[38]
The Authority did not respond to Vukani’s request for reasons
but only provided reasons when prompted to do so for purposes
of the
review application. That was done long after the expiration of the 90
day period stipulated in section 5(2). It was argued
that the
authority was not permitted to provide reasons belatedly. Reliance is
placed on inter-alia dicta in the decision of National
Lotteries
Board v SA Education and Environment Project, 2012(4) SA (SCA). The
issue in that matter was whether an administrative
body was entitled
to rely on new reasons, different from its initial reasons provided.
It is distinguishable from the present situation
where no reasons
were provided initially but only provided belatedly. For the purpose
of this judgement, it is not necessary to
decide the issue. I accept
that an applicant who is not provided with reasons, is entitled to
apply for review on the strength
of the presumption without having to
rely on other factors.
[39]
The presumption remains rebuttable. If it appears from the
evidentiary material that the decision was taken for good reason,
the
presumption may be rebutted. The presumption only prevails in the
absence of proof to the contrary. The presumption can be
controverted
by the facts which, in my view, have been done in this matter.
[40]
It is evident from the papers that Vukani’s objections were
fully canvassed, argued and considered in the public hearing
on 20
April 2017. The CEO, chair and three board members were present. The
process was transparent and fair. Independent
investigations were
sought and obtained, dealing with all Vukani’s objections at
the time.
[41]
In belated reasons the Authority informed the interested parties that
it has considered and approved all material amendments
including the
change in shareholding and directors. It informed that probities on
all relevant individuals and entities were conducted
and none found
to be disqualified. It has considered all relevant information,
objections and investigation reports and, based
on the evidence,
dismissed the objections.
[42]
We sit as a court of review and not appeal. We are not called upon
nor empowered to decide the correctness of the decisions
taken. It is
clear that the decision to grant a licence was not taken arbitrarily
or capriciously but was substantiated
by the available
evidence. In my view, none of the grounds of review on which Vukani
relies are convincing. The application for
review stands to be
dismissed with costs.
IN
CONCLUSION I PROPOSE THE FOLLOWING ORDERS
:
1. The first, second and
third respondents’ application for condonation of the late
filing of the answering affidavits is
granted, the said respondents
to bear the costs of the application for condonation.
2. The condonation
application for the late filing of the applicants answering
affidavits to the condonation application in paragraph
1 above is
granted, the applicant to bear the costs thereof.
3. The application to
strike out paragraphs 8.3 to 8.10 of the applicant’s
supplementary founding affidavit is granted and
the said paragraphs
struck from the record with costs.
4. The costs of the
applicant’s application in terms of the
Promotion of
Administrative Justice Act and
the costs of the applicant’s
application to compel are to be paid by the third respondent.
5. The application for
review is dismissed with costs.
6. All the aforesaid
costs orders are to include costs occasioned by the employment of two
counsel, where so employed.
___________________
A.F.
JORDAAN, J
I
concur and it is so ordered
_________________
S. NAIDOO, J
On
behalf of the Applicant: Adv. PBJ Farlam, SC
Adv.
CD Pienaar
Instructed
by:
Lovius Block
Bloemfontein
On
behalf of the 1
st
, 2
nd
, 3
rd
Respondent: Mr. NW Phalatsi
Instructed
by: NW Phalatsi & Partners.
Bloemfontein
On
behalf of the 4
th
Respondent: Adv. B Roux, SC
Adv.
M Smit
Instructed
by: CJ Lewis.
C/O
Attorneys: Noordmans Inc.
Bloemfontein