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[2021] ZASCA 137
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Vukani Gaming Free State (Pty) Ltd v Pillay & Others (577/2020) [2021] ZASCA 137 (6 October 2021)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not Reportable
Case no: 577/2020
In the matter
between:
VUKANI
GAMING FREE STATE (PTY) LTD APPELLANT
and
MR D
PILLAY, THE CHAIRPERSON, FREE STATE
GAMBLING,
LIQUOR AND
TOURISM
AUTHORITY
FIRST RESPONDENT
MR KA
DICHABE, THE CHIEF EXECUTIVE
OFFICER,
FREE STATE GAMBLING, LIQUOR
AND TOURISM
AUTHORITY
SECOND RESPONDENT
FREE STATE
GAMBLING, LIQUOR
AND TOURISM
AUTHORITY
THIRD RESPONDENT
RESTIVOX
(PTY) LTD
FOURTH RESPONDENT
THE MEMBER
OF THE EXECUTIVE
COUNCIL FOR
THE DEPARTMENT OF
ECONOMIC,
SMALL BUSINESS
DEVELOPMENT,
TOURISM &
ENVIRONMENTAL
AFFAIRS,
FREE STATE
PROVINCE
FIFTH RESPONDENT
THE
ENTITIES LISTED IN ANNEXURE “A”
TO THE
NOTICE OF MOTION
SIXTH
RESPONDENT
Neutral citation:
Vukani Gaming Free State (Pty) Ltd
v Pillay & Others
(Case no
577/20)
[2021] ZASCA 137
(6 October 2021)
Coram:
WALLIS, SALDULKER, MBATHA and
MABINDLA-BOQWANA JJA and UNTERHALTER AJA
Heard:
30 August 2021
Delivered:
This judgment was handed down
electronically by circulation to the parties’ legal
representatives by email, publication on
the Supreme Court of Appeal
website and release to SAFLII. The date and time for hand-down is
deemed to be 9h45 on 6 October 2021.
Summary:
Administrative law – Review of
administrative decision taken by the Free State Gambling, Liquor &
Tourism Authority to
grant a limited gambling machine route operator
licence – investigation report backdated – reasons for
decision inadequate
– appeal upheld.
ORDER
On
appeal from:
Free
State Division of the High Court, Bloemfontein (Jordaan and Naidoo
JJ, sitting as a court of first instance):
1
The appeal is upheld with costs including the costs of two counsel.
2
Paragraphs 5 and 6 of the order of the Free State Division of the
High Court, Bloemfontein are set aside and replaced with the
following order:
‘
5.
The review application succeeds with costs.
6.
The matter is remitted to the third respondent for reconsideration
and the decision is to be made within 90 calendar days of
the date of
this order.
7.
The operation of this order is suspended pending the decision of the
third respondent in terms of paragraph 6 above.’
JUDGMENT
Mabindla-Boqwana
JA
(Wallis,
Saldulker and Mbatha JJA and Unterhalter AJA concurring):
Introduction
[1]
The appellant, Vukani Gaming Free State (Pty) Ltd (Vukani), is part
of a national group of businesses
involved in the gaming industry in
the Free State province and is a holder of a route operator licence
issued for that purpose.
The fourth respondent, Restivox (Pty) Ltd
(Restivox), is part of a similar group. The two are in competition.
On 31 May 2017, the
third respondent, the Free State Gambling, Liquor
& Tourism Authority (the Authority), granted a similar
licence to Restivox
in terms of s 72 of the Free State Gambling,
Liquor and Tourism Act 6 of 2010 (the Act). This appeal follows the
dismissal by the
Free State Division of the High Court, Bloemfontein
(high court) of Vukani’s review of that decision. It serves
before us
with the leave of this Court.
[2]
By way of explanation, a route operator licence is a licence granted
in terms of s 64(1)
[1]
of the Act to operate limited pay-out gambling machines (LGMs). These
LGMs are installed in places like restaurants and pubs. They
are
similar to slot machines in casinos (but with pay-outs that are for
limited amounts). Site operators are issued with site operator
licences in order to operate lawfully.
Factual
background
[3]
The matter before us has a long-drawn-out history dating back to
February 2011 when the predecessor
to the Authority, the Free
State Gambling and Racing Board, issued a Request for Proposals,
inviting applications for a second
operator licence in the Free State
province. Until then Vukani had been the only holder of a route
operator licence in the province.
[4]
On 6 May 2011 Restivox submitted an application to the Authority in
response to the invitation. Public
hearings in respect of this
application were held on 7 February 2013. At the public hearings
Vukani queried the shareholding structure
of Restivox. In particular,
it raised a concern about the inclusion of two black women who were
Free State residents, Anna Makhetha
(Makhetha) and Thato Lion (Lion)
as direct shareholders of Restivox, as they were public servants.
Sophia Swartz (Swartz), another
Free State resident, who was in
attendance at the public hearings, also questioned her inclusion as
an indirect shareholder of
Restivox through Atretone (Pty) Ltd
(Atretone), when she was not.
[5]
Restivox’s response to these complaints was that Makhetha and
Lion were not civil servants at
the time its application was
submitted. They took up employment after the submission of Restivox’s
licence application. As
regards the position of Swartz, the
explanation was that one Quentin Eister, who held shares in Atretone,
had offered shares to
Swartz. Restivox wrongly believed that Swartz
had accepted the shares when she had not. According to Restivox, that
issue was subsequently
corrected.
[6]
Restivox raised a further issue that Kennedy Khoza (Khoza)’s
shareholding was shown as having
increased from 3 percent to 4
percent, which was not the case. According to Vukani, Khoza, who had
initially denied any knowledge
of this increase to Vukani’s
attorney, later ‘changed his tune in support of Restivox’s
position’. On the
whole, Vukani’s complaint was that
Restivox’s application was deficient and contained
misrepresentations. Its objection
regarding these shareholding issues
was that Restivox was engaged in the practice of ‘fronting’
in order to burnish
its image with the Authority as a transformed
business.
[7]
On 19 December 2013, the Board of the Authority (the Board) refused
Restivox’s application. Restivox
took the Board’s refusal
on review before the high court. At the hearing of the review
application, on 2 February 2015, the
parties settled the matter on
the basis that the Board would reconsider Restivox’s
application. That agreement was made an
order of court. The matter
went back to the Board. On 11 June 2015 it reconsidered the
application, effectively accepting Restivox’s
explanation as
regards the shareholding complaints made by Vukani, and granted the
route operator licence to Restivox.
[8]
Aggrieved by this decision, Vukani, launched its own application in
October 2015, to review and set
aside the Board’s decision. In
that application it contended that when granting the licence
application to Restivox, the
Board was unaware that five directors
had resigned from Restivox, leaving only two directors, Sundri
Padayachee (Padayachee) and
her son Mergan Naidoo (Naidoo), who were
both Gauteng based. The court reviewed and set aside the Board’s
decision on 8 December
2016 (per Molitsoane AJ and Hancke J
concurring). It found, inter alia, that the Board ‘acted
unlawfully and irrationally
when it allowed crucial amendments to the
Restivox application and failed to subject the process to a further
public participation’.
It referred the matter back for
reconsideration and ordered that an appropriate public hearing
process be followed as prescribed.
An application for leave to appeal
the court’s decision was dismissed by the high court on 3 March
2017.
[9]
As a consequence of that judgment, Restivox sent a letter dated
4 March 2017 to the Board,
addressing the issues raised by
Vukani in its review application and, in particular those relating to
changes in directorships.
Vukani again objected to Restivox’s
amended licence application on the basis that deliberate false
misrepresentations were,
inter alia, made by Restivox in the original
application regarding shareholding and directorships and that
Padayachee and Naidoo
were as a result not fit and proper persons as
required by the provisions of the Act. Vukani also complained that
Restivox was
not entitled to amend its application without the
approval of the Board. The Board responded to Vukani’s
objection in a letter
dated 13 April 2017 and held public hearings on
20 April 2017.
[10]
The Board decided to refer the issues raised by both parties for
forensic investigation conducted by Gobodo Forensic
and Investigative
Accounting (Pty) Ltd (Gobodo). Gobodo provided the Board and/or
management of the Authority with a number of
reports, which were the
subject of the dispute before us. In January 2013, it had undertaken
a similar investigation covering some
of the same issues and it
revived this in May 2017, shortly before the Board made the impugned
decision to grant the licence to
Restivox on 31 May 2017. There is a
dispute as to how many reports served before the Board and which of
the reports was taken into
account when the Board made its decision
on 31 May 2017, as there were various versions of updated
supplementary reports.
[11]
Vukani alleges that it discovered that the Board had awarded the
licence to Restivox when applications for site
operator licences were
advertised by Restivox on 4 July
2017. As can
be seen from the papers, Restivox entered into agreements with
various entities some of which are cited as respondents,
as site
operators or applicants for site operator licences.
[12]
Having discovered the Board’s decision, Vukani requested access
to information in terms of the
Promotion of Access to Information Act 2 of 2000 (PAIA)
on 5
July 2017
. The Authority failed to
provide the necessary information, so Vukani launched an application
in the high court for an order directing
the Authority to furnish it
with a response to its PAIA request. This matter was settled by way
of an agreed court order.
[13]
On 20 November 2017, Vukani lodged its review application before the
high court. The Authority failed to file a
complete Rule 53 record as
required.
No
transcript of the proceedings at the meeting of 31 May 2017 was
provided as part of this record.
At Vukani’s request, the Authority furnished two affidavits
signed by the first respondent, (Pillay) and the second respondent
(Dichabe), stating that the meeting of 31 May 2017 was not recorded
and therefore a transcript of that meeting was not available.
This
turned out not to be entirely accurate. In his opposing affidavit,
Pillay said that while the meeting had not been recorded
shorthand
notes had been taken.
He
attached a document purporting to be a typed version of the notes. A
copy of the handwritten notes was only made available pursuant
to an
interlocutory application brought by Vukani in terms of Rule 35(12).
These notes were not in shorthand, but written in a
somewhat
illegible handwriting with no signature or name of the author.
[14]
These notes
assumed significance in the light of Pillay’s explanation of
what was before the Authority at its meeting on 31
May 2017, when the
decision to award the licence to Restivox was taken. He said that the
Authority had received a report from Gobodo
on 16 May and this was
the report before the Authority at the 31 May meeting, during which a
presentation was given by Alberto
Torres (Torres) of Gobodo. This
appeared to be borne out by the notes, which recorded that Torres
made a presentation at the outset
in which he said that the report in
question was supposed to be dated 15 May, but due to an error in
their offices it was dated
10 May. A report bearing that date formed
part of the record.
[15]
This version of events began to unravel when Torres filed a
confirmatory affidavit. In it, he said that Gobodo
had provided
the
Authority with the following reports:
‘
A
draft investigation report dated 30 January 2013;
A
supplementary report for discussion purposes dated 17 May 2017;
A
supplementary report dated 31 May 2017, which was presented to the
FSGLA Board meeting held on 31 May 2017; and
A
final supplementary report dated 7 June 2017, which was issued to the
management of the Authority.’
The
glaring omission from this affidavit was any reference to a report
dated 10 May 2017.
[16]
After Torres filed his affidavit, Pillay deposed to a further
affidavit saying that he had not been aware of the
further report of
7 June 2017. Pursuant to Torres’ averment, he enquired about
the report and was advised by Torres that
it had been requested by
the management of the Authority for audit purposes. This report,
according to him, was never tabled at
any Board meeting. In any
event, on the date of the said report, so he alleged, the Board had
already made a decision to award
the licence to Restivox and the
report could have in no way been considered for purposes of awarding
the licence.
[17]
When the Rule 53 record was delivered, Vukani complained that the
Gobodo reports dated 17 May 2017, 31 May 2017
and 7 June 2017, as
well as the draft investigation report dated 30 January 2013, had not
been included as part of the record.
This prompted Vukani to seek
disclosure of these three versions of the report
along
with
a copy of the short-hand notes, under Rule 35(12). The
Authority initially refused to disclose the Gobodo reports, forcing
Vukani
to bring an interlocutory application to compel which was
settled by way of an agreed order on 16 May 2019.
[18]
Vukani questioned the authenticity of the handwritten notes, in
particular, that they were neither signed nor certified.
It also
pointed to the strangeness of these notes surfacing in the
Authority’s answering affidavit, whereas Pillay and Dichabe
had
earlier indicated on oath that no recording of the Board discussions
of the meeting of 31 May 2017 existed. Vukani also pointed
out
various anomalies concerning the Gobodo reports, including the
differences between Pillay’s and Torres’ versions
as to
which report served before the Board on 31 May 2017. According
to Vukani, it was not likely that the Board would have
had a complete
report before it, as the report dated 31 May 2017 (as per Torres’
affidavit) appeared incomplete and was described
by him as a
supplementary report.
[19]
The review application served before Jordaan and Naidoo JJ in the
high court. On 5 December 2019, the high court
dismissed the
application with costs including those occasioned by the employment
of two counsel, where so employed. The court
also granted, in
Vukani’s favour, costs of the PAIA application that had stood
over. The findings of the high court in regard
to the review
application were, inter alia, the following:
‘…
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.
…
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.
…
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.’
It
is the appeal from this decision of the high court which is before
us.
Issues
on appeal
[20]
The main grounds for review raised by Vukani were that: (a) the
Authority was biased in favour of Restivox, was
reasonably suspected
of bias or acted in bad faith; (b) the Authority failed to take into
account relevant factors and to apply
its mind properly to the
matter, including by taking its decision on the basis of a draft (an
incomplete) report which was furnished
to it by Gobodo for the first
time at the Board meeting of 31 May 2017, which could have in no way
been considered before the impugned
decision was made; (c) by failing
to consider that Restivox had deliberately made false statements by
including two local black
women as shareholders in Restivox, when
they had never been such. Also, Restivox gave disingenuous or
inaccurate explanations for
these falsehoods; (d) the impugned
decision should be taken to have been made without good cause, as the
Authority failed to provide
adequate reasons, or any reasons at all,
until called upon by Restivox to do so for purposes of their
answering affidavit. The
decision was accordingly unreasonable.
[21]
Vukani’s central argument on appeal was that the similarities
in the reports dated 10 May 2017 and the one
dated 7 June 2017
coupled with the fact that the report of 31 May 2017 was incomplete,
led to an inescapable conclusion that the
Authority backdated the
report of 7 June 2017, which was the final supplementary report, to
10 May 2017. It produced this altered
version in an attempt to
indicate that the Authority had sight of the final Gobodo report well
before the meeting of 31 May 2017,
at which the decision was made to
award the licence to Restivox.
[22]
Both the Authority and Restivox contended that the backdating of the
report was a new issue, not raised by Vukani
on the papers.
Accordingly, they argued that they could not properly respond to
these issues in their answering affidavits. It
was however
acknowledged by the Authority’s attorney, who appeared before
us, that the issue was raised in argument in the
high court, but
rejected on the basis that it was not on the papers.
[23]
The Authority and Restivox argued further that the existence of the
Gobodo reports made no difference as the issues
in dispute that
turned on the shareholding and directorships in Restivox, had been
resolved. In any event, they submitted, all
the reports were the same
in relation to the issues in dispute. The report of 7 June 2017
raised nothing new that the Board would
not have known when they made
their decision on 31 May 2017. It was further contended on behalf of
Restivox that all the issues
that Vukani raised were simply a rehash
of what had properly been answered by Restivox.
Discussion
[24]
The immediate issue to be addressed concerns the Gobodo reports.
According to Torres, there were altogether four
reports prepared by
Gobodo, namely those of 30 January 2013, 17 May 2017, 31 May 2017 and
7 June 2017. Although Pillay said that
the report on which the
Authority based its decision was the report dated 10 May 2017, though
not mentioned by Torres, no supplementary
affidavit from him was
provided to deal with the additional report that he did not mention.
This was very peculiar.
[25]
The purpose of the 2013 investigation was to establish whether
Restivox ‘included any disqualified entities
or persons or
other factors relating to the probity of its owners, directors and
managers, in terms of the …national and
provincial
legislation.’ All the 2017 reports were supplementary to the
2013 report. If the report that served before the
Board was that
dated 10 May 2017, what was the purpose of the reports dated 17 and
31 May 2017 respectively? Especially strange
was that the report of
17 May was far shorter than the ostensibly earlier report of 10 May.
Why an existing complete report should
have been abbreviated in this
way was never explained.
[26]
Torres’ affidavit said nothing about the report dated 10 May
2017. If this was an error, only Torres could
rectify it, not Pillay.
To compound the problem, not only did Pillay fail to mention the
other reports, particularly those generated
after 10 May 2017, he
contradicted Torres as to which report was considered by the Board on
31 May 2017. According to Torres, the
report dated 31 May 2017 was
presented by Gobodo at that meeting. Pillay alleged that Gobodo
provided the Authority with a final
report on 16 May 2017. According
to Torres, the final report was submitted on 7 June 2017.
[27]
It was contended on behalf of the Authority that the report dated
17 May 2017 was the executive summary
of the report dated
10 May 2017. This is not the case. The 17 May report contains 48
pages of detailed content some of which is
repeated in other reports
including the report dated 10 May 2017. In fact, the report of 10 May
2017 has its own executive summary.
It is also remarkable that both
the reports of 17 and 31 May 2017 are water marked as draft reports.
[28]
A close analysis of the reports of 31 May 2017 and 7 June 2017 shows
that the latter was a cleaning up of the former.
Examples of this can
be found in the indexes of the reports. The report of 7 June includes
new sub-headings, such as paragraph
12 at page 64. There is
substantial improvement of language and correction of errors in the
later 7 June report. Substantive changes
can be noted in various
places such as paragraphs 14.1.2 at page 67 of the report and 16.4.3.
In paragraph 14.1.2 of the 31 May
2017 report, a statement is made
that a request had been made for the provision of undisclosed or
contingent liabilities. The same
paragraph in the 7 June 2017 report
reflects that a letter had been received from Restivox’s
auditors confirming that there
were no undisclosed or contingent
liabilities.
[29]
Furthermore, in paragraph 16.4.3 of the 31 May report a request was
to be made to Restivox to provide an updated
sensitivity analysis.
The same paragraph in the 7 June report indicates that the updated
financials, had been received and a comment
was made about them
appearing to be reasonable. Another example is paragraph 23.3 of the
31 May report, which has nine sub-paragraphs
while the 7 June
report has twelve. Paragraph 23.4.3, stating ‘[i]n our view,
Restivox’s responses are reasonable
and satisfactory’ is
not contained in the earlier report of 31 May 2017. Paragraph 25 of
the 31 May report is differently
worded from the 7 June report.
[30]
There are other significant peculiarities noted from the 10 May
report. Paragraphs 1.9.7 and 15.1.6 of the 10 May
report, which are
identical to the 7 June report, make reference to a letter dated
15 May 2017 that was provided by Restivox.
The date on this letter is
post 10 May 2017. This letter is also mentioned in the same
paragraphs of the 31 May report, although
the paragraphs are
differently worded. It makes no sense that a letter dated 15 May 2017
would be mentioned in a report of 10 May
2017. It is however logical
that the letter would have been provided prior to the 31 May and 7
June reports.
[31]
It is inexplicable how a report dated 10 May 2017, allegedly produced
before the reports of 17 and 31 May, could
contain all the
modifications from the 31 May report that appear in the 7 June
report. The materiality of those changes is not
the issue. The mere
presence of the modifications made between 31 May and 7 June in a
report seemingly produced on 10 May is what
is concerning. It appears
that the Authority was sent an electronic copy of the 7 June report
which would make it possible to change
the date from 7 June to 10
May. It was not explained why a specific report was required for
audit purposes, as averred by Pillay,
when the report of 31 May was
available.
[32]
The Authority could not provide answers to these problems in
argument. The contention that the backdating of the
report was not on
the papers was not helpful. Restivox would not be in the position to
provide any answers to these questions as
they lay at the Authority’s
door. The question of which version served before the Board at the
meeting of 31 May 2021 was
always queried by Vukani. The letter dated
11 March 2019 from Vukani’s attorneys to the Authority’s
attorneys confirmed
as much. Vukani’s argument, therefore, that
the report of 10 May 2017 was a backdated version of the report of 7
June 2017
remained uncontroverted. There is no possibility of error
on the papers. The Authority’s attorney was unable to get
around
this. It is not clear why the Authority would go to the
lengths of tampering with the date on Gobodo’s report, if not
to
make it appear that the Board considered a final report when
making a decision on 31 May 2017.
[33]
Pillay alleged that the report considered on 31 May 2017 was
submitted to the Authority by Gobodo on 16 May 2017
(oddly a day
before the 17 May 2017 supplementary report which he was silent on).
This rather peculiar date was not connected to
any event, although it
was prior to the meeting of 24 May, where the minutes record that the
authority had not had time to consider
the report, and therefore
postponed the proceedings to 31 May. The handwritten notes, the
origin and scribe of which were not identified,
which attributed to
Torres that ‘he…indicated that the report submitted to
the Authority was supposed to be dated
15
th
of May
2017 but due to error from their office it was dated 10
th
May 2017’
were inconsistent with Torres’ affidavit. Contrary to Pillay’s
assertion, Torres did not
confirm the correctness of his affidavit.
Instead he gave an irreconcilable version. There was no basis for the
high court to reject
Torres’ affidavit as he was the director
responsible for the investigation of the Restivox application and
presented the
Gobodo report at the Board meeting of 31 May. The high
court erred by not scrutinising the version given by the Authority
and holding
that Torres must have made a mistake in his affidavit. It
consequently erred by finding that the resemblance of the reports of
10 May and 7 June was a factor in favour of the Authority. To the
contrary, the issue of the similarity between the reports was
against
it for the reasons mentioned above.
[34]
The problems in this case were exacerbated by the fact that there was
no proper explanation as to what was considered
by the Board before
making the decision to award the licence to Restivox. Pillay’s
affidavit, read with the handwritten notes
and the minutes, went no
further than alleging that the Board deliberated on the application,
amendments to the application, objection
lodged, public hearing,
Gobodo report and all relevant documents.’ This was not
helpful. The Authority was requested by Vukani
to provide reasons
under s 5(1) of the
Promotion
of Administrative Justice Act 3 of 2000
(PAJA)
on 5 July 2017. This failure also prompted Restivox to ask for
reasons in a letter dated 14 August 2018, complaining about
the
prejudice that it would suffer due to lack of reasons. Reasons were
provided over a year after the request was made by Vukani
and they
were wholly inadequate.
[35]
As pointed out by
Hoexter
[2]
‘.
. .
reasons
are not really reasons unless they are properly informative. They
must explain
why
action was taken or not taken; otherwise they are better described as
findings or other information’.
The
rationale for giving reasons is to enable an aggrieved party to
understand the reasoning behind the decision and decide whether
or
not to challenge it. Reasons should constitute more than mere
conclusions. They should refer to the relevant facts, the applicable
law and the processes leading to the conclusions.
[3]
Recently in
Maxrae
Estates (Pty) Ltd v Minister of Agriculture, Forestry and Fisheries &
Another,
[4]
this Court held that the mere mention that a ‘discretion has
been exercised for the given purpose was not sufficient. The
court
was constrained to intervene where the decision maker had ignored the
relevant factors and taken into account irrelevant
considerations’.
What factors the Board took into account in this instance, it is not
clear.
[36]
The
importance of reasons was highlighted in
Koyabe
v Minister of Home Affairs
as
follows:
‘
63.
Although the reasons must be sufficient, they need not be specified
in minute detail, nor is it necessary to show how every
relevant fact
weighed in the ultimate finding. What constitutes adequate
reasons will therefore vary, depending on the
circumstances of
the particular case. Ordinarily, reasons will be adequate if a
complainant can make out a reasonably substantial
case for a
ministerial review or an appeal.
64. In
Maimela
, the factors to
be taken into account to determine the adequacy of reasons were
succinctly and helpfully summarised as guidelines,
which include
–
“
[t]he factual context
of the administrative action, the nature and complexity of the
action, the nature of the proceedings leading
up to the action and
the nature of the functionary taking the action. Depending on the
circumstances, the reasons need not always
be ‘full written
reasons’; the ‘briefest
pro
forma
reasons may suffice’.
Whether brief or lengthy, reasons must, if they are read in
their factual context, be intelligible
and informative. They must be
informative in the sense that they convey why the decision-maker
thinks (or collectively think) that
the administrative action is
justified”.
The
purpose for which reasons are intended, the stage at which these
reasons are given, and what further remedies are available
to contest
the administrative decision are also important factors. The list,
which is not a closed one, will hinge on the facts
and circumstances
of each case and the test for the adequacy of reasons must be an
objective one.’
[5]
[37]
The reasons
provided by the Authority were a far cry from what could be
considered reasonable. Much can be said about the fact that
Restivox
provided answers to Vukani’s objections, as appears in various
reports. This was however not the issue. The issue
was how the Board
arrived at its conclusion to award the licence to Restivox. The
Authority did not tell us. It simply listed documents
or information
that the Board had at its disposal.
[38]
Whether or not the Gobodo reports made a difference to the
substantive issues was also not the issue. The Board
called for an
independent investigation of the Restivox application and therefore
was bound to take into account the Gobodo reports
as part of the
decision-making process. The questions raised on the suspected
tampering with the reports cannot be ignored. They
raised doubts
about the validity of the process. As demonstrated above, it was
difficult to accept that the report of 10 May 2017
was genuine.
[39]
In conclusion on this issue, given the unexplained incongruences, the
inadequacy of reasons and the late production
of records, some of
which do not correspond with the facts, the decision taken by the
Board cannot be sustained. This is worsened
by the fact that the
Board appeared not to have had a complete report when it made its
decision. Added to that, the report of 31
May which was presented by
Gobodo at the meeting, on close scrutiny, appears to have had
outstanding matters which were only resolved
later, if regard is to
be had to the 7 June report. For those reasons, Vukani’s
impugning of the Board’s decision
is supported by the
presumption in s 5(3)
[6]
of PAJA. It should accordingly not stand.
[40]
As to remedy, Vukani sought substitution of the decision of the Board
in the notice of motion and in its heads
of argument. Counsel for
Vukani did not press for this in argument, correctly so, as it would
not have been an appropriate remedy
in the circumstances. He,
however, contended that if the Court were to order remittal of the
matter, Pillay and Dichabe should
not be present in the deliberation
process as they were the individuals behind the uncooperative and
obstructive conduct of the
Authority.
[41]
Insofar as Pillay’s position is concerned, the position is
clearer. He gave dubious explanations as to how
the decision was made
on 31 May 2017. While Pillay is the chairman of the Board, we were
told that there would be no difficulty
with someone else chairing the
meeting in his absence. As for Dichabe, the Chief Executive Officer,
it is not clear how he can
be excluded from the meeting. In any
event, the person appearing to be prominent in the disputed conduct
of the Authority in the
review process is Pillay.
[42]
Finally, counsel for Restivox requested that, the status quo in
relation to the position of site operators be maintained
if the
matter were to be remitted to the Board for reconsideration. He
contended that the reviewing and setting aside of the high
court
order would affect site operators, many of whom are small businesses
who rely on the income they derive from the LGMs installed
at their
sites. He submitted that the Court is entitled to make a just and
equitable order in terms of s 172(1)
(b)
of the Constitution by
preserving the status quo in the interest of the economy while a
decision is being made by the Board. Further,
the Board should be
given a short period in which to consider the remitted issues.
[43]
I do not foresee any difficulty with this request. The facts of this
case are peculiar. Given the time this litigation
has taken,
considered against the hardship that may result in the immediate
application of the order to many people, it seems just
and equitable
to give a suspended order. It also appears just and equitable to give
the Board a limited period in which to make
the decision, so as to
overcome any prejudice that may be suffered by any of the parties.
The issues that should be determined
are also narrow, they relate to
the objections raised by Vukani.
[44]
As to costs, counsel for Vukani requested that the costs order that
was granted by the high court in its favour,
in respect of the PAIA
application, be set aside and substituted for an order awarding it
costs on a scale as between attorney
and client. He further submitted
that costs on the punitive scale are also warranted in respect of the
review application and that
Pillay and Dichabe be ordered to pay part
of the costs awarded against the Authority personally.
[45]
It is established that costs are largely treated as a matter for the
court’s discretion. No sufficient basis
has been laid in this
case to alter the costs awarded by the high court in respect of the
PAIA application. Similarly costs on
a scale as between attorney and
client as well as personal costs orders against Pillay and Dichabe
are not warranted in this case.
It bears mention that there is a
growing trend of parties seeking costs against state officials in
their personal capacities. This
kind of relief is not for the mere
asking, it is an order that would be defensible only in exceptional
circumstances. I am not
convinced that this is such a case.
[46]
In the result, the following order is made:
1
The appeal is upheld with costs including the costs of two counsel.
2
Paragraphs 5 and 6 of the order of the Free State Division of the
High Court, Bloemfontein are set aside and replaced with the
following order:
‘
5.
The review application succeeds with costs.
6.
The matter is remitted to the third respondent for reconsideration
and the decision is to be made within 90 calendar days of
the date of
this order.
7.
The operation of this order is suspended pending the decision of the
third respondent in terms of paragraph 6 above’.
N P
MABINDLA-BOQWANA
JUDGE OF APPEAL
APPEARANCES
For the
appellant:
P B J Farlam SC (with him C D Pienaar)
Instructed
by
:
Lovius Block, Bloemfontein
For the first to third respondents:
N W Phalatsi & Partners, Bloemfontein
For the fourth
respondent:
B Roux SC (with
him M Smit)
Instructed by:
Cliffe Dekker Hofmeyr Attorneys, Sandton
Noordmans Inc, Bloemfontein
[1]
Section 64(1) of the Free State Gambling, Liquor
and Tourism Act (the Act) provides that ‘[t]he Authority may,
subject to
the provisions of this Act, grant the following licences
in respect of gambling, namely –
(a). . .
(
b
)
limited gambling machine operator licences;
(
c
)
limited gambling machine site licences.’
[2]
C
Hoexter
Administrative
Law in South Africa
(2012)
at
461.
[3]
Gavric
v Refugee Status Determination Officer
[2018] ZACC 38
;
2019 (1)
BCLR 1
(CC);
2019 (1) SA 21
(CC) para 69. See also
Minister of
Environmental Affairs and Tourism and Another v Phambili Fisheries
(Pty) Ltd
[2003] 2 All SA 616
(SCA);
2003 (6) SA 407
(SCA) para
40.
[4]
Maxrae
Estates (Pty) Ltd v The Minister of Agriculture, Forestry and
Fisheries & Another
[2021] ZASCA
73
para 17.
[5]
Koyabe
v Minister of Home Affairs
[2009] ZACC 23
;
2009 (12) BCLR 1192
(CC);
2010 (4) SA 327
(CC) para
63-64.
[6]
Section 5(3) of PAJA provides: ‘If an
administrator fails to furnish adequate reasons for an
administrative action it must,
subject to subsection (4) and in the
absence of proof to the contrary, be presumed in any proceedings for
judicial review that
the administrative action was taken without
good reason.’