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[2018] ZAFSHC 202
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Restivox (Pty) Ltd t/a Goldrush Gaming Slots Free State v Chairperson of the Free State Gambling, Liquor and Tourism Authority and Others (6461/2017) [2018] ZAFSHC 202 (12 November 2018)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE STATE
DIVISION, BLOEMFONTEIN
Case
No: 6461/2017
In
the matter between:
RESTIVOX
(PTY) LTD t/a
GOLDRUSH
GAMING SLOTS FREE STATE Applicant
And
THE CHAIRPERSON OF THE
FREE STATE
GAMBLING, LIQUOR AND
TOURISM AUTHORITY 1
st
Respondent
THE FREE STATE
GAMBLING, LIQUOR
AND TOURISM
AUTHORITY 2
nd
Respondent
VUKANI GAMING FREE
STATE (PTY) LTD 3
rd
Respondent
ITHUTENG CONSULTANCY
(PTY) LTD 4
th
Respondent
24 TM BOKAMOSOTRADING
ENTERPRISE CC 5
th
Respondent
MAONO CONSTRUCTIONS
AND
PROPERTY DEVELOPMENT
(PTY) LTD 6
th
Respondent
JUDGMENT
CORAM:
NAIDOO J et OPPERMAN J
HEARD
ON:
12 NOVEMBER 2018
DELIVERED ON:
12 NOVEMBER 2018
[1]
This is an application to review and set aside the decisions of the
second respondent, dated 9 May 2016, in terms of which it
approved:
1.1 The acquisition by
the fourth respondent of a financial interest in the third
respondent, and
1.2 The acquisition by
the sixth respondent of a financial interest in the third respondent.
Adv
J Els appeared for the applicant. The first and second respondents
initially opposed the application but subsequently withdrew
their
opposition. There was no appearance on their behalf at this hearing.
The third to sixth respondents did not oppose the application,
which
proceeded on an unopposed basis.
[2]
The applicant is a competitor of the third respondent, who is the
holder of Route Operator Licence, issued by the second respondent
in
terms of the Free State Gambling, Liquor and Tourism Act 6 of 2010
(the Act). A Route Operator’s Licence enables the third
respondent to enter into agreements with site operators to place
Limited Gaming Machines at their sites. These are gaming machines
which are programmed to pay out certain sums subject to a
pre-determined limit.
[3]
The third respondent applied, to the second respondent on 12 January
2016, for approval of a change of more than 5% of its shareholding,
which was comprised as follows:
3.1 Vukani Gaming
Corporation – 45%
3.2 SACTWU Welfare Trust
Free State – 15%
3.3 24 TM Bokamoso
Trading Enterprise CC – 20%
3.4 Scenisolve (Pty) Ltd
– 20%
The proposed change in
the shareholding of the third respondent was comprised as follows:
3.5 Ithuteng Consultancy
(Pty) Ltd (new shareholder) – 15%
3.6 Maono Construction
and Property Development (Pty) Ltd (new shareholder) – 10%
3.7 The shareholding of
24 TM Bokamoso Trading Enterprise CC be reduced from 20% to 15 %
[4]
The above changes were approved by the second respondent on 9 May
2016, and the applicant seeks to have this decision reviewed
and set
aside in terms of section 6(2)(b) of the Promotion of Administrative
Justice Act 3 of 2000 (PAJA), on the basis that a
mandatory and
material procedure or condition prescribed by an empowering provision
was not complied with, and/or section 6(2)(c)
of PAJA in that the
decision was procedurally unfair. The basis of the applicant’s
contentions is that section 84 of the
Act, read with sections 63 and
65 to 69 of the Act, requires that notice of the applications must be
published in the Provincial
Gazette and a newspaper circulating in
the area, with the aim of allowing objections to be raised to such
applications, that representations
in respect of such objections be
received and that the second respondent must hold public hearings, if
necessary. The applicant
contends that the applications were not
published in the Provincial Gazette or in a local newspaper. As a
result, there was no
opportunity to file objections and or for public
participation, as envisaged in the Act. This much was conceded by the
third respondent
in its Answering Affidavit to an application by the
applicant in which the latter sought,
inter
alia
, an investigation into whether or not
the third respondent’s shareholding complied with Broad –Based
Black Economic
Empowerment, as required in the conditions of the
third respondent’s Route Operator License. The third
respondent asserted
that
“
Due to an
unfortunate inadvertent error, those applications were not advertised
for public comment”.
[5]
The applicant set out in its Founding Affidavit numerous objections
it would have raised, had the applications been published
and the
public participation process been followed, as envisaged by the Act.
It is not necessary at this stage to deal with such
objections, save
to say that had the proper processes been followed, the applicant
would have been in a position to ventilate such
objections, which in
turn, may or may not have altered the decision that was made by the
second respondent.
[6]
Section 84(1) and (3) provide as follows:
“
84
Financial interests in business of licensee
(1)
Any
person, other than an institutional investor, a depository
institution or a central securities depository, who directly or
indirectly, procures a financial interest of 5 % or more in the
business to which a licence relates must, within the prescribed
period and in the prescribed manner, apply to the Authority for
approval to hold such interest.
(2)…..
(3)
The
provisions of sections 63 and 65 to 69 must,
mutatis
mutandis
apply
in relation to an application contemplated in subsection (1) and (2).
[7]
Section 63
deals with
the disqualification of certain persons from holding licences or a
financial interest in the holder of a licence referred
to in the Act.
Section 64
empowers
the granting of gambling licences.
Section 65
stipulates the procedure for submission of an application for a
licence.
Section 65(2)(b)(ii)
bears mention, in that it stipulates that an application for a
licence must be accompanied by
“
certified
copies of the prescribed notice published in the Provincial Gazette
and a newspaper circulating in the area in which the
premises, where
the gambling is to take place, are situated”.
Section
67
stipulates the manner and time period in
which a person wishing to object to an application may do so.
Section
68(1)
provides that any application,
objections and response thereto lodged with the Authority (in this
case the second defendant), must
be open to inspection by interested
persons who, upon payment of the prescribed fee, will be entitled to
a copy or extracts from
such application, objections or response. The
word “must” in Section 68(3) obliges the Authority to
hold a hearing
where an objection has been lodged against an
application, at a date, time and place it has determined after notice
of such hearing
has been published in the Provincial Gazette and a
newspaper circulating in the area where the premises to which the
application
refers, are situated.
Section 69
provides that the Authority may, in order to determine whether a
licence should be granted, gather such relevant information from
any
person or source.
[8]
As indicated, the applicant approaches this court in terms of section
6(2)(b) and /or section 6(2)(c) of PAJA. Section 6(2)(b)
and (c) of
PAJA provide as follows:
“
A
court or tribunal has the power to judicially review an
administrative action if-
(a)
….
(b)
a mandatory and material procedure or condition prescribed by an
empowering provision was not complied with;
(c)
the action was procedurally unfair;”
[9]
Section 84 of the Act, which is an empowering provision, as envisaged
in PAJA, makes the mandatory provisions of sections 63
and 65 to 69
applicable to applications for a change in shareholding of a licence
holder. Publication of the applications in the
Provincial Gazette and
a newspaper circulating in the area in which the relevant premises
are situated is mandatory in terms of
the Act. The reason for this is
to invite any objections to such applications, to hold public
hearings in order to properly ventilate
such objections and enable
the Authority to investigate such objections. This ensures
procedurally fair processes which inform
the resultant administrative
actions, rendering such actions themselves fair, rational and
reasonable.
[10]
It is not in dispute that the fourth and sixth respondents failed to
advertise, in accordance with the precepts of the Act,
the
applications by the fourth and sixth respondents to acquire a
financial interest of more than 5% in the third respondent. This
is
clearly a non-compliance with the mandatory and material provisions
of the Act, as envisaged by section 6(2)(b) of PAJA.
[11]
The decisions of the second respondent approving the acquisitions by
the fourth and sixth respondents of a financial interest
in the third
respondent are therefore based on defective applications, rendering
the process which culminated in the decisions
by the second
respondent procedurally unfair to the applicant. The latter was
deprived of the opportunity to lodge its objections
to the
applications, due to not receiving notice of the application, and was
unable to properly raise those objections as a result
of the public
participation process not being followed. This court is therefore
empowered in terms of section 6(2)(b) and (c) of
PAJA to review the
decisions of the second respondent.
[12]
The applicant raised the issue of its non-compliance with the
provisions of section 7 of PAJA, which stipulates that a review
in
terms of PAJA must be brought within 180 days of the applicant being
informed or becoming aware of the decision sought to be
reviewed. The
applicant set out a chronology of events, during which it requested
information from the second respondent, and after
an application was
brought to court on 7 July 2017 to compel the furnishing of such
information, most of it was furnished, except
the second applicant’s
approvals granted to the fourth and sixth respondents on 9 May 2016.
[13]
Such approvals only came to light on 19 October 2017, in an Answering
Affidavit by the third respondent, in the application
brought by the
applicant for an order directing the second respondent to investigate
the shareholding of the third respondent.
The present application was
launched on 8 December 2017. There is no dispute that the decision
which the applicant now seeks to
review only came to its attention on
19 October 2017. In my view, the applicant acted within the required
180-day period. The applicant
pointed out that in terms of, section 9
of PAJA this court has the discretion to extend the period of 180
days, where the interests
of justice require it. This application is
unopposed, and there is no objection or information before this court
which would militate
against the court exercising its discretion in
favour of the applicant. The applicant indicated that the second
respondent furnished
it with the approval in respect of the fifth
respondent, pursuant to the court order dated 7 July 2017. Even if it
is argued, on
that basis, that this application was brought outside
the 180-day period, my view is that it would be in the interests of
justice
that such extension be granted. In the final analysis, it is
not necessary for this court to exercise its discretion as I have
expressed the view that this application was brought within the
180-day period. Mr Els advised the court that the applicant no longer
seeks a costs order against any of the respondents, and seeks an
order only in respect of prayer 1 of the Notice of Motion.
[14]
In the circumstances, the following order is made:
14.1 The decisions of the
second respondent, handed down on 9 May 2016, in terms of which the
second respondent approved:
14.1.1 The acquisition of
a financial interest in the third respondent by the fourth
respondent,
14.1.2 The acquisition of
a financial interest in the third respondent by the sixth respondent,
are hereby reviewed and
set aside.
14.2 No order is made in
respect of costs.
______________________
S.
NAIDOO J
I
agree
____________________
L OPPERMAN J
On
behalf of Applicant: Adv. Adv. J Els
Instructed
by: Noordmans Inc
1
Eighth Street
Arboretum
Bloemfontein
(Ref:
A Noordman)
On
behalf of 1
st
& 2
nd
Respondents:
Instructed
by: Kirshen Naidoo & Company Inc
Suite
7 Canterbury Park
67
President Reitz Avenue
Westdene
Bloemfontein
(Ref:
MAT7310/KKN/BFN)
On
behalf of the 3
rd
Respondent:
Instructed
by: Lovius Block Attorneys
31
First Avenue
Westdene
Bloemfontein
(Ref:
C12363*PDY/mn/S179/16)