Brief Summary

Administrative Law — Review of administrative action — Transfer of administration of the KwaZulu-Natal Gaming and Betting Act — Afrisun KZN (Pty) Limited challenged the constitutionality of the transfer to the Premier of KwaZulu-Natal, alleging non-compliance with the Constitution — Court held that Afrisun is entitled to pursue its review application as an intervening applicant and to obtain dates for the hearing of the issues referred to in the prior court order.

Comprehensive Summary

Summary of Judgment

1. Introduction

The proceedings were an application for declaratory relief brought in the KwaZulu-Natal Division of the High Court, Pietermaritzburg. The applicant, Afrisun KZN (Pty) Limited t/a Afrisun Casino & Entertainment Kingdom (“Afrisun”), sought orders directed primarily at clarifying its procedural and substantive status in earlier review proceedings under the same case number, and at undoing the consequences of a subsequent withdrawal of those earlier proceedings by the then applicants.

The principal respondents were the Premier of KwaZulu-Natal and the MEC for Finance, KwaZulu-Natal, who had originally instituted the earlier review application (referred to in the judgment as “the main review”). A large group of respondents comprised various bingo operators and related entities (including the “Galaxy” and “Gold Rush” parties), together with the KwaZulu-Natal Gaming and Betting Board (“the Board”) and certain individuals. The Peoples Forum Against Electronic Bingo Terminals (“the Forum”) and Peermont Global KZN (Pty) Ltd (“Peermont”) featured in the litigation history, including intervention attempts, although the application before Koen J concerned Afrisun’s position.

The procedural history was central. After the Board’s decision on 16 January 2015 approving the use of electronic bingo terminals (EBTs) at bingo premises, the Premier and MEC launched the main review on 30 January 2015 seeking to set that decision aside. Afrisun and the Forum promptly brought applications to intervene. On 5 February 2015, Vahed J made a consent order which, on its face, granted Afrisun and the Forum leave to intervene “without prejudice” to later arguments. Later, on 28 April 2015, Lopes J made a case-management order separating out specified interlocutory issues for determination first, including intervention and joinder-related disputes. The main review was not thereafter enrolled for hearing.

In late 2016 the Premier, after purportedly settling with certain respondents, filed a notice of withdrawal of the main review. Afrisun disputed the validity and effect of that withdrawal and, in 2018, brought this application primarily to establish that it had already been joined as a co-applicant and could continue to prosecute the review notwithstanding the Premier and MEC’s withdrawal.

The general subject-matter of the underlying dispute concerned administrative decisions and regulatory approvals allowing bingo operators to use EBTs in KwaZulu-Natal, and the associated litigation contesting that authorisation. However, Koen J’s judgment was directed not to the merits of EBT authorisation, but to the procedural status of Afrisun within the existing litigation framework.

2. Material Facts

It was common cause that the Board, acting under the KwaZulu-Natal Gaming and Betting Act 8 of 2010, on 16 January 2015 resolved to approve various applications by bingo operators to use EBTs at identified bingo premises in specified numbers. This Board resolution (Resolution BD0115.11) was the “impugned decision” underlying multiple review efforts.

It was also common cause that the Premier and MEC launched the main review on 30 January 2015 seeking to review and set aside the impugned decision, and that Afrisun and the Forum were not initially cited as parties. Afrisun and the Forum then launched intervention applications (early February 2015), with Afrisun’s intervention papers contemplating that it would support the main review relief and later supplement its case in terms of Uniform Rule 53(4) after production of the record.

On 5 February 2015, Vahed J issued an order (by agreement) which, among other procedural directions, recorded that Afrisun and the Forum were “hereby granted leave to intervene without prejudice to any party to raise any arguments in this respect”. Thereafter Afrisun filed a supplementary affidavit in the main review under Rule 53(4) and delivered an amended notice of motion expanding the review relief and including challenges to certain EBT registration decisions. Afrisun proceeded in the papers as “third applicant” and the Forum as “fourth applicant”.

On 28 April 2015, Lopes J issued an order directing that specified interlocutory matters would be heard first, including the intervention applications and objections to intervention, the permissibility of certain additional prayers in Afrisun’s amended notice of motion, and a joinder application brought by Afrisun. The substantive review issues were deferred.

A further undisputed factual development was that in November 2016 the Premier and MEC filed a notice of withdrawal of the main review, after communications suggesting settlement between the Premier and some respondents. Afrisun objected to the withdrawal and delivered a notice under Uniform Rule 30(2)(b), and the Premier later delivered a notice in terms of Uniform Rule 15(2) regarding substitution of the Premier as applicant.

The court noted that there were “some factual disputes on the papers”, but Afrisun contended the decisive questions were legal, and the court recorded that any material factual disputes would be approached on the respondents’ version in accordance with Plascon-Evans Paint Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A). Ultimately, the judgment’s dispositive reasoning proceeded on the interpretation of existing court orders and the procedural posture, rather than resolving contested evidentiary matters.

3. Legal Issues

The central legal question was the proper interpretation and legal effect of paragraph 8 of Vahed J’s order of 5 February 2015, and specifically whether that order had the effect of granting Afrisun leave to intervene so that it became a co-applicant (the “third applicant”) in the main review, or whether Afrisun remained merely a prospective intervening party whose intervention still required later determination.

This issue was characterised in the judgment as one going to locus standi and procedural entitlement: if Afrisun was already a party to the main review, it could (subject to any later successful objection contemplated by Lopes J’s order) continue to pursue the review and could seek enrolment of the interlocutory issues identified by Lopes J. If Afrisun had not been admitted as a party, then its rights to take steps in the main review would be materially different, and the withdrawal of the main review by the Premier and MEC would arguably have ended Afrisun’s ability to proceed within that litigation framework.

A related issue was whether it was necessary or appropriate for the court to determine the additional relief Afrisun sought in paragraphs 1 to 6 of its notice of motion (including challenges to the transfer of administration of the Act to the Premier under section 137 of the Constitution and to the lawfulness of the withdrawal). The court treated those issues as potentially academic once Afrisun’s entitlement to proceed as a co-applicant was established, raising the question whether declaratory relief should be refused where it would not resolve a live controversy for the applicant.

The dispute therefore primarily concerned law (interpretation of court orders; principles governing declaratory relief and academic disputes), and the application of law to a procedural history. It also involved a discretionary/value component in relation to whether the court should decide issues that would have only academic significance and whether to grant declarations in that context.

4. Court’s Reasoning

The court approached the matter by identifying the “true issue” as the need to clarify Afrisun’s status immediately prior to the notice of withdrawal, and whether Afrisun could pursue and enrol the outstanding interlocutory issues reserved by Lopes J. The court noted that some heads of argument traversed whether Afrisun should be permitted to intervene at all, but held that those merits-based objections were themselves part of the interlocutory questions reserved for later determination under paragraph 1.1 of Lopes J’s order, and were not the issues to be decided in this application.

A substantial part of the reasoning concerned the interpretation of court orders. Relying on Electoral Commission v Mhlope and Others 2016 (5) SA 1 (CC) (and the related authorities it referenced), the court stated that a court order must be construed using the ordinary principles of construction: the intention is primarily ascertained from the language of the order read as a whole, in context. The court emphasised that where the meaning is clear and unambiguous, extrinsic evidence is not admissible to alter it.

Applying those principles, the court held that the language of paragraph 8 of Vahed J’s order was clear: it stated that Afrisun and the Forum were “hereby granted leave to intervene”. The qualification “without prejudice to any party to raise any arguments in this respect” was not understood as negating the grant of leave; rather, it preserved the right of other parties to later raise objections which, if upheld, could result in Afrisun being non-suited despite having been allowed to participate in the interim. The court regarded this as practically explicable given the urgency at the time and the need to regulate the further exchange of affidavits within the review framework.

The court rejected the opposing respondents’ submission that Vahed J’s order merely dealt with procedural directions and did not confer party status. It reasoned that, if the intention had been to keep intervention pending, the order could easily have described Afrisun as a “prospective intervening applicant” or similar. The court treated the selected wording as deliberate and legally operative. It also considered that the subsequent conduct of the parties supported this interpretation: Afrisun participated as third applicant after the order, and no party brought a Uniform Rule 30 irregular-step challenge to Afrisun’s procedural participation on the basis that it was not a party.

The court further considered the later case-management order of Lopes J. It accepted that Lopes J’s order contemplated that objections to Afrisun’s intervention could be raised and decided later, but held that this was consistent with the view that Vahed J had already granted leave, subject to later challenge, rather than evidence that leave had not been granted at all. In this respect, the court treated Lopes J’s order as providing a structured mechanism for later determination of whether Afrisun should ultimately be disqualified from continuing, not as undoing the effect of Vahed J’s earlier order.

Having concluded that Afrisun became a party to the main review on 5 February 2015, the court held that Afrisun was entitled to declaratory relief confirming that it may pursue the review in that case number, unless and until a court, acting pursuant to Lopes J’s reserved interlocutory issues, upholds a disqualifying objection. Flowing from that, Afrisun was also entitled to obtain dates to set down the outstanding issues reserved by Lopes J for determination.

Once this conclusion was reached, the court dealt with Afrisun’s broader prayers (paragraphs 1 to 6 of the notice of motion) by characterising them as, for Afrisun’s purposes, academic. The judgment explained that declaratory orders are directed at concrete rights and live disputes, and are generally not granted to decide academic questions. The court considered the suggestion that those declarations might provide useful clarity for future dealings with the Premier, MEC, or Board, but found that no dispute of sufficient legal significance to Afrisun had been articulated that would justify adjudication once Afrisun’s entitlement to proceed was confirmed. The court therefore declined to determine those issues in the judgment.

The court also briefly addressed an argument raised by some respondents that the litigation had become academic due to the KwaZulu-Natal Gaming and Betting Amendment Act 4 of 2017, which amended the definition of “bingo” in a manner said to accommodate EBTs. The court did not decide this point because it was not properly foreshadowed in the affidavits and because Afrisun contended that other review grounds remained relevant. The court suggested that, in future management of the litigation, the factual foundation for such an “academicness” argument might need to be developed.

On costs, the court declined to decide costs immediately. It accepted Afrisun’s proposal that costs stand over and invited written submissions after the delivery of reasons, noting the general principle that courts do not decide issues solely to determine costs.

5. Outcome and Relief

The court granted declaratory relief confirming Afrisun’s procedural entitlement within the main review. It declared that Afrisun, having been granted leave to intervene on 5 February 2015 and joined as third applicant, is entitled to pursue the review application under case number 1366/15 unless and until a court upholds a disqualifying argument pursuant to paragraph 1.1 of Lopes J’s order dated 28 April 2015.

The court further declared that Afrisun is entitled to obtain dates to set down the hearing of the issues referred to in paragraph 1 of Lopes J’s order in the main application.

The court did not grant (and was not disposed to grant) the relief aimed at setting aside the transfer of administration of the Act to the Premier or at reviewing and setting aside the Premier and MEC’s decision to withdraw the main review, treating those matters as academic once Afrisun’s entitlement to proceed was established.

All questions of costs were postponed for later determination. The parties were invited to deliver written submissions on costs (and potentially on whether any decision on paragraphs 1 to 6 would be required), to be submitted within 20 court days of delivery of the judgment.

Cases Cited

Plascon-Evans Paint Ltd v Van Riebeeck Paints (Pty) Ltd [1984] ZASCA 51; 1984 (3) SA 623 (A).

Electoral Commission v Mhlope and Others 2016 (5) SA 1 (CC).

Firestone South Africa (Pty) Limited v Genticuro 1977 (4) SA 298 (A).

Finishing Touch 163 (Pty) Limited v BHP Billiton Energy Coal South Africa Limited and Others 2013 (2) SA 204 (SCA).

Eke v Parsons 2016 (3) SA 37 (CC).

Ex Parte Women’s Legal Centre: In Re Moise v Greater Germiston Transitional Council 2001 (4) SA 1288 (CC).

Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA).

Manong and Associates v The Director General: Department of Public Works 2003 JDR 0760 (C).

SA Post Office Ltd v Chairperson: Western Cape Provincial Tender Board 2001 (2) SA 675 (C).

Legislation Cited

Constitution of the Republic of South Africa, 1996 (including section 137; and sections 125, 127, 132, 133 and 195 as referenced in the papers).

KwaZulu-Natal Gaming and Betting Act 8 of 2010.

KwaZulu-Natal Gaming and Betting Amendment Act 4 of 2017.

KwaZulu-Natal Gambling Act 10 of 1996.

Public Finance Management Act 1 of 1999.

Promotion of Administrative Justice Act 3 of 2000.

Rules of Court Cited

Uniform Rule 6.

Uniform Rule 7.

Uniform Rule 10(3).

Uniform Rule 15(2).

Uniform Rule 30(2)(b).

Uniform Rule 53(4).

Uniform Rule 6(14).

Held

The court held that, on a proper construction of Vahed J’s consent order of 5 February 2015, Afrisun had already been granted leave to intervene and thereby became a party (third applicant) to the main review proceedings under case number 1366/15. The “without prejudice” qualification was held not to negate intervention, but to preserve other parties’ ability to raise later objections which might ultimately disqualify Afrisun, an issue reserved for later determination under Lopes J’s interlocutory management order.

It further held that, in consequence, Afrisun is entitled to continue pursuing the review under that case number and is entitled to enrol and obtain hearing dates for the interlocutory issues identified in Lopes J’s order. The court declined to determine the additional declaratory and review relief sought in paragraphs 1 to 6 of Afrisun’s notice of motion because, on the findings made, those issues were of only academic significance to Afrisun at this stage.

The issue of costs was held over for later determination on written submissions.

LEGAL PRINCIPLES

A court order is interpreted by applying ordinary principles of construction, with primary emphasis on the language of the order read as a whole, together with its reasons and legal context. Where the meaning is clear and unambiguous, extrinsic evidence cannot be admitted to alter, contradict, vary, qualify, or supplement the order, as applied with reference to Constitutional Court authority on interpreting judgments and orders.

A consent order granting leave to intervene can validly confer party status while simultaneously preserving other parties’ rights to later raise objections to the intervention. The presence of a “without prejudice” qualification may preserve the ability to contest locus standi or other disqualifying grounds later, without undoing the immediate procedural effect of the grant of leave.

Courts generally do not grant declaratory relief where the determination sought would be mainly academic or would not resolve a live dispute concerning the applicant’s rights. The court approached Afrisun’s broader challenges (to the withdrawal of the main review and related constitutional issues) as unnecessary to decide once Afrisun’s entitlement to pursue the review as a party was confirmed.

Where motion proceedings involve factual disputes, any material dispute may be approached on the respondents’ version in accordance with the Plascon-Evans rule, although the dispositive issues in this case were treated as predominantly legal and interpretive.

Afrisun KZN (Pty) Limited t/a Afrisun Casino and Entertainment Kingdom v Premier of KwaZulu-Natal and Others (1366/15) [2018] ZAKZPHC 25 (22 June 2018)