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[2015] ZAKZPHC 52
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Shoprite Checkers (Pty) Limited v Member of the Executive Council for Tourism and Environmental Affairs: KwaZulu Natal and Others (1633/2014) [2015] ZAKZPHC 52 (20 November 2015)
IN THE HIGH COURT OF
SOUTH AFRICA
KWAZULU-NATAL DIVISION,
PIETERMARITZBURG
CASE NO: 1633/2014
DATE: 20 NOVEMBER 2015
In the matter between:
SHOPRITE CHECKERS (PTY)
LIMITED
..........................................................................
Applicant
And
MEMBER OF THE EXECUTIVE COUNCIL FOR
TOURISM AND ENVIRONMENTAL AFFAIRS:
KWAZULU-NATAL
….................................................................................................
First
Respondent
PREMIER - KWAZULU-NATAL PROVINCIAL
GOVERNMENT
..................
Second
Respondent
KWAZULU-NATAL LIQUOR
AUTHORITY
.........................................................
Third
Respondent
Summary:
KwaZulu-Natal Liquor
Licencing Act 6 of 2010 - applicability of section 48(5)(e) to
pre-existing licence holders under Liquor Act
27 of 1989 - observance
of requirement that no licenced premises to be within 500m
circumference of school or religious institution.
Whether liquor
licence constitutes property under s 25 of Constitution - whether
relocation of licenced premises - deprivation
for the purposes of s
25(1).
ORDER
Delivered: 20 November 2015
1. Application dismissed.
2. No order as to costs.
CHETTYJ
1. The issue for determination in this
matter is whether the KwaZulu-Natal Liquor Licensing Act 6 of 2010
(the KZN Act) prohibits
the applicant, Shoprite Checkers, a retailer,
from operating twelve (12) of its existing liquor outlets on the
basis that these
fall within a radius of 80m of an institution of
learning or a religious institution. This calls for an assessment of
competing
interests - at the one side is the provincial government,
which is striving to address the socio-economic implications of
having
access to liquor in close proximity to schools and religious
institutions, even though this may have been condoned under the
previous
regulatory regime. On the other side of the equation are the
interests of the applicant a corporate entity seeking to protect its
licence to trade in the sale of liquor under circumstances where such
continued trading is at variance with prevailing governmental
policy.
This tension was accurately captured in First National Bank of SA Ltd
t/a Wesbank v Commissioner, South African Revenue
Service &
another; First National Bank of SA Ltd t/a Wesbank v Minister of
Finance
[2002] ZACC 5
;
2002 (4) SA 768
(CC) where the Court at para 50 noted:
„The preamble to the Constitution
indicates that one of the purposes of its adoption was to establish a
society based, not
only on 'democratic values' and 'fundamental human
rights', but also on 'social justice'. Moreover the Bill of Rights
places positive
obligations on the State in regard to various social
and economic rights. Van der Walt [The Constitutional Property Clause
(Juta,
Kenwyn, 1997) aptly explains the tensions that exist within s
25:
“[T]he meaning of s 25 has to be
determined, in each specific case, within an interpretative framework
that takes due cognisance
of the inevitable tensions which
characterise the operation of the property clause. This tension
between individual rights and
social responsibilities has to be the
guiding principle in terms of which the section is analysed,
interpreted and applied in every
individual case.”
The purpose of s 25 has to be seen both
as protecting existing private property rights as well as serving the
public interest, mainly
in the sphere of land reform but not
limited thereto, and also as striking a
proportionate balance between these two functions.”"
(footnotes omitted)
2. The relief sought by the applicant
is the following:
a. ..Declaring that the KwaZulu-Natal
Liquor Licensing Act 6 of 2010 (the “KZN Act”) does not
per se prohibit and/or
render unlawful the sale or continued sale of
liquor for consumption off the licensed premises (being either a
liquor store or
a grocers" store) by a person in circumstance
where:
i. such premises are situated within a
circumference of 500 metres from a learning institution and/or
religious institution as defined
in section 1 of the KZN Act; and;
i. the said person was the holder of a
liquor licence granted pursuant to the provisions of the national
Liquor Act 27 of 1989 which
licence was in force immediately before
the commencement of the KZN Act, and which is regarded from the date
of commencement of
the KZN Act, by virtue of section 101(1 )(a) of
the KZN Act, as a licence for the retail sale of liquor referred to
in section
39 (b) (i) and/or (ii) of the KZN Act, and which licence
has not otherwise been validly cancelled or terminated;
b. Reviewing and setting aside
regulation 47 of the KwaZulu-Natal Liquor Licensing Regulations, 2014
(PN 45 Published in PG 1081
of 13 February 2014) (the regulations);
c. Extension of the period of 180 days
for the launching for this application, as envisaged in section in
section 9 of the Promotion
of Administrative Justice Act ( NO 3 of
2000), to the extent that it may be necessary;
d. In the alternative to paragraph 2
above, declaring that regulation 47 of the Regulations is
inconsistent with the Constitution
and invalid;
e. Directing and First and Second
Respondents to pay the costs of this application jointly and
severally alternatively (should the
Third Respondent oppose this
application) directing the Respondents to pay the costs of this
application jointly and severally."
3. After the hearing of argument on 4
June 2015, judgment was reserved. At the time I was mindful that the
matter of Shoprite Checkers
(Pty) Limited v Member of the Executive
Council for Economic Development, Environmental Affairs and Tourism,
Eastern Cape &
others
2015 (6) SA 125
(CC) had been argued in the
Constitutional Court and judgment was reserved. Upon the handing down
of the decision of the Constitutional
Court on 30 June 2015, I
requested both parties to furnish me with their supplementary
submissions in light of the Court"s
decision. The last of the
responses was received by me on 28 July 2015.
BACKGROUND
4. The applicant is the holder of 110
retail licences that allow it to sell liquor off the premises (both
at liquor stores and at
grocers" stores). The majority of these
licences were granted under the Liquor Act 27 of 1989 (the 1989 Act).
Of this number,
12 licences (11%) are in respect of premises that are
situated within 80m of a learning or religious institution. These
“affected
premises” are spread throughout the geographic
area of KwaZulu-Natal, including the areas of Pinetown,
Pietermaritzburg,
Scottburgh, Amanzimtoti, Durban North and Dube
Village.
5. It is not disputed by the
respondents that in granting these licences under the 1989 Act, the
Liquor Board acting in terms of
s 32(1), would have issued a licence
to sell liquor on premises approved by the Board, provided that such
premises was not specifically
excluded. It is also not disputed that
the 1989 Act contained no restriction on the operation of a liquor
store based on its proximity
to a religious or learning institution.
Provided the operation of a liquor store took place without causing a
disturbance to the
functioning of a place of worship or a school, and
there was no prejudice to the residents of a particular
neighbourhood, in terms
of s 22(2)(d)(cc) such operation would be
condoned. It is clear that the Board used the criteria of amenity
interference as the
yardstick by which it would gauge whether to
grant a licence.
6. The Constitution, in Schedule 5,
Part A, provides that one of the functional areas of exclusive
provincial legislative competence
is that of liquor licenses. In or
about 1997 the national legislature began a process of drafting new
national liquor legislation
to replace the 1989 Act. The Liquor Bill,
which eventually resulted, was referred to the Constitutional Court
to decide on its
constitutionality, particularly with regard to the
issue of whether the granting of liquor licenses was a national or
provincial
competence. The Constitutional Court found that the Bill
represented an encroachment by the national legislature into an area
of
exclusive provincial legislative competence. The Court in Ex Parte
President of the Republic of South Africa: In Re Constitutionality
of
the Liquor Bill
[1999] ZACC 15
;
2000 (1) SA 732
(CC), held at para 58 that:
„The structure of the
Constitution... suggests that the national government enjoys the
power to regulate the liquor trade
in all respects other than liquor
licensing. For the reasons given earlier, this, in my view, includes
matters pertaining to the
determination of national economic
policies, the promotion of inter-provincial commerce and the
protection of the common market
in respect of goods, services,
capital and labour mobility."
At para 79 the Court found that:
„... the licensing competence in
respect of retail sales of liquor falls squarely within the exclusive
provincial legislative
power afforded by Schedule 5."
7. Following the decision in Liquor
Bill, the provinces thereafter proceeded to enact provincial liquor
legislation allowing for
the regulation of retail liquor licensing in
the provinces. In KwaZulu-Natal, the KZN Act was enacted, and the
first sections thereof
came into operation on 1 August 2012. After
consultation with the National Minister, by proclamation in General
Notice No. 34 on
26 February 2014, the 1989 Act ceased to be
applicable in the province.
THE KZN LIQUOR ACT
8. Section 101 of the KZN Act provides
for the conversion of licences and approvals and provides in
sub-section (1)(a) as follows:
„(1) Notwithstanding the
provisions of section 39, and in accordance with the transitional
provisions of the Liquor Act-
(a) every licence or approval set out
in the first column of Schedule 2 and in force immediately before the
date of commencement
of this Act, is from the commencement date of
this Act regarded as a licence in
the category set out in the second
column of Schedule 2: Provided that-
(i) the terms and conditions and
trading days and trading hours applicable to such licence,
immediately prior to this Act coming
into effect, continue in force
until the date upon which such licence is required to be renewed in
terms of the Liquor Act, 1989
(Act 27 of 1989);
(ii) the said terms and conditions and
trading days and trading hours are not inconsistent with the
provisions of this Act; and
(iii) in the event that the said terms
and conditions or trading days and trading hours are inconsistent
with the provisions of
this Act, then the provisions of this Act are
applicable;
(2) (a) The holders of the licences,
approvals, notices and determinations referred to in subsection (1)
are entitled to a licence
certificate or permit in terms of section
62 of this Act for the relevant category of licence as contemplated
in section 39, without
having to comply with the application
procedure for such a licence or permit contemplated in Chapter 6.
(b) All existing terms and conditions
and trading hours applicable to such licences, approvals, notices and
determinations must
be endorsed on the licence certificate in
accordance with subsection (1).
(3) (a) The holders of the licences,
approvals, notices and determinations referred to in subsection (1)
must receive such licence
certificate or permit upon presentation to
the Liquor Authority of proof of their licences, approvals, notices
and determinations
referred to in subsection (1) and the terms and
conditions and trading hours to which such licences, approvals,
notices and determinations
are subject, and upon payment of the
annual fee prescribed in terms of section 64.
(b) The holders of the licences,
approvals, notices and determinations referred to in subsection (1)
must obtain their licence certificates
or permits under this Act
within three years of the commencement of this Act.
(4) In the event that a holder does not
convert the licences, approvals, notices and determinations within
the prescribed period
referred to in subsection (3)(Jb), such
licences, approvals, notices and determinations become invalid, as
provided for in the
transitional provisions of the Liquor Act."
(my underlining)
9. Section 38 of the KZN Act provides
that „no person may sell liquor for retail or micro-manufacture
liquor unless that person
is licensed in terms of this Act’.
Section 1 defines a “licensed person" as a ‘person
to whom a licence
has been issued or who is regarded as licensed in
terms of this Act’. Section 41 sets out the process to be
followed by a
person applying for a liquor licence. In that regard it
bears noting that s 41 (2)(b)(i) provides that the person applying
for
the licence must provide a detailed motivation and specify “the
proximity of the proposed premise to learning institutions,
religious
institutions and other licenced premises”.
10. Section 48 deals with applications
for licences for the retail sale of liquor for consumption, on and
off the premises. The
provisions of s 48(5) and (6) of the Act are
set out below in full, as they are relevant to the determination of
this dispute.
„(5) Before granting an
application, the Liquor Authority must satisfy itself that-
(a) the granting of the application
will be in the public interest;
(b) the applicant is not disqualified
from holding a licence in terms of this Act;
(c) the premises upon which the sale or
consumption of liquor will take place are or will upon completion be
suitable for use by
the applicant for the purposes of the licence;
(d) the use of the proposed premises
for the proposed activity would not be contrary to existing zoning
laws or land use rights;
(e) the proposed premise is not located
within a circumference of 500 metres of any religious or learning
institutions; and
(f) the proposed premise is not located
within a circumference of 500 metres of other licensed premises
within residential areas.
(6) In determining whether the
application will be in the public interest as contemplated in
subsection (5)(a), the Liquor Authority
must consider, without
detracting from the generality
thereof,-
(a) the prejudice or harm, or potential
prejudice or harm, of the proposed licence to or on residents,
property owners, other businesses
including licensed liquor premises,
property values, schools and religious institutions within a radius
of 500 metres surrounding
the proposed premises or in close proximity
thereto; and
(b) the extent to which the proposed
licence will contribute to, or detract from, the achievement of the
objects of the Act, including
the extent to which the proposed
licence-
(i) will or is likely to impact on the
socio-economic rights of society, including the prevalence of crime,
and the costs of alcohol
abuse;
(ii) will facilitate the entry of new
participants and diversity in the liquor industry; and
(iii) will contribute to the fostering
of an ethos of social responsibility in the liquor industry."
(my underlining)
11. It is common cause that this
application is to be resolved on the basis of an interpretation to be
accorded to the provisions
of s 101 (1 )(a)(iii) read with s 48(5)(e)
of the KZN Act as to whether it per se prohibits the applicant, and
by implication others
who may be similarly situated, from operating
liquor outlets within 80m of a school or religious institution. In
essence, the applicant
contends that the prohibition is only
applicable to those applying for new licenses and not to those who
are pre¬existing holders
of licenses issued under the 1989 Act.
The applicant contends that as the holder of pre-existing licenses, s
48(5)(e) does not
apply to it, and even if it did, the removal of
this right to trade where it currently does, would constitute an
arbitrary deprivation
of property, and accordingly a violation of the
right to property protected under s 25 of the Constitution.
12. As this matter hinges on the
interpretation to be placed on the so-called “offending
section” of the KZN Act, a
useful starting point is the
approach to interpretation of agreements set out in Natal Joint
Municipal Pension Fund v Endumeni
Municipality
2012 (4) SA 593
(SCA)
where the Court at para 18 stated:
..Interpretation is the process of
attributing meaning to the words used in a document, be it
legislation, some other statutory
instrument, or contract, having
regard to the context provided by reading the particular provision or
provisions in the light of
the document as a whole and the
circumstances attendant upon its coming into existence.
Whatever the nature of the document,
consideration must be given to the language used in the light of the
ordinary rules of grammar
and syntax; the context in which the
provision appears; the apparent purpose to which it is directed and
the material known
to those responsible for its
production A sensible meaning is to be preferred to one
that leads to insensible or
unbusinesslike results or undermines the apparent purpose of the
document. Judges must be alert to,
and guard against, the temptation
to substitute what they regard as reasonable, sensible or business
like for the words actually
used. To do so in regard to a statute or
statutory instrument is to cross the divide between interpretation
and legislation; in
a contractual context it is to make a contract
for the parties other than the one they in fact made. The
..inevitable point of
departure is the language of the provision
itself", read in context and having regard to the purpose of the
provision and
the background to the preparation and production of the
document, (my underlining).
13. Mr Janisch, who appeared with Ms Du
Toit for the applicant, made it clear at the outset of the hearing
that the applicant does
not challenge the prohibition imposed by the
KZN Act that no new licences will be granted in respect of premises
located within
80m of a school or place of worship. Similarly, I did
not understand the applicant to challenge the rationale of the first
respondent
in introducing the prohibition. To this end, the
contentions advanced by the first and second respondents as to the
compelling
social reasons for the provincial government adopting a
policy which prohibits a liquor licence being granted in respect of
premises
falling within a radius of 80m of a school or religious
institution, are unchallenged. In this regard, it bears noting that
the
provincial government was concerned at the social effects of
liquor being sold from premises located within a distance of 80m of
a
school or a place of worship. It contended that some learners are
immature and unable to make moral or value judgements, and
at an age
where they are susceptible to social experimentation. In addition,
the availability of alcohol is exacerbated in poorer
schools, where
learners do not get the necessary support and guidance, and are
easily tempted to buy alcohol.
14. The respondents submit that the
policy of locating licensed premises outside of an 80m radius was
reached after extensive public
participation with liquor
manufacturers, retailers, traders associations and others. According
to the first respondent, the MEC
for Transport, Community Safety and
Liaison estimates that there are 673 liquor outlets next to places of
worship, and 930 outlets
next to schools in KwaZulu-Natal. In the
region of the eThekwini Municipality alone, there are 222 outlets
next to places of worship,
with 251 outlets located next to schools.
15. In light of the above factors, the
respondents submit that sound policy considerations were taken into
account in the formulation
of the prohibition contained in s 48(5)
and (6) of the KZN Act. It was furthermore not disputed that the
Constitutional Court in
the Liquor Bill case confirmed that
provincial liquor boards are entrusted with considerable leeway in
applying “community
considerations” on the registration
of retail premises (see para 78 of Liquor Bill).
16. Accordingly, the applicant's only
concern is whether the provisions of s 101 read with s 48(5)(e) apply
to the holders of pre-existing
licences acquired under the previous
liquor licencing regime. If it does not, they submit that Regulation
47 which was promulgated
to make provision for a temporary amnesty
must then be struck down as unconstitutional on the basis that it is
a “dead-letter”,
serving no purpose by its continued
existence. On the other hand, if it is found that the KZN Act
operates to prohibit both new
licence holders and pre-existing
licence holders from operating within a radius of 80m of a school or
place of worship, then, the
respondents submit, Regulation 47 should
remain intact, as it may well be a lifeline to allow the applicant to
apply for amnesty,
pending a conversion of its existing licence, to
bring it into conformity with the provisions of the current KZN Act.
17. Mr Dickson SC, who appeared on
behalf of the respondents, submitted that the prohibition contained
in s 48(5)(e) applied to
all persons who wished to operate a liquor
outlet, and that the legislature did not intend to create a two-tier
system of those
with “old order rights” and new
applicants. What was equally important, according to the respondents,
was the context
within which the legislative changes contained in s
48(5) and (6) were adopted as a means to address the negative impact
which
alcohol has on the lives of young people. Accordingly, the
provisions of the KZN Act must be seen as a legislative response from
the provincial government based on policy and community
considerations. In Weare v Ndebele
2009 (4) BCLR 370
(CC) the Court
stated at para 58:
„The applicants" argument
therefore fails to show that the policy decisions made and being made
in KwaZulu-Natal fall
outside the bounds of legitimate legislative
choice. It is for the legislature to select the means to achieve the
objectives of
government. It is also for the legislature to decide
when the moment has arrived to change methods and reform legislation.
If it
is not shown that the duty to uphold the Constitution requires
courts to interfere, these choices are the Legislature'^ to make."
INTERNAL REMEDIES
18. Before dealing with the merits of
the application, it is necessary to dispense with two preliminary
points raised by the respondents.
The first relates to an apparent
non-compliance on the part of the applicant with the provisions of
Rule 16A(1)(a) which provides
that:
,Any person raising a constitutional
issue in an application or action shall give notice thereof to the
registrar at the time of
filing the relevant affidavit or pleading."
The respondents contend that the
requirement of a Rule 16A notice in a matter such as this would be
crucial as a decision by this
Court on the applicability of s
48(5)(e) of the KZN Act to pre-existing liquor licence holders would
have ramifications for holders
other than the applicant. In Hoffmann
v South African Airways
2001 (1) SA 1
(CC) para 63 Ngcobo J described
the role of the amicus as:
„...not a party to litigation,
but believes that the Court's decision may affect its interest. The
amicus differs from an
intervening party, who has a direct interest
in the outcome of the litigation and is therefore permitted to
participate as a party
to the matter. An amicus joins proceedings, as
its A name suggests, as a friend of the Court. It is unlike a party
to litigation
who is forced into the litigation and thus compelled to
incur costs. It joins in the proceedings to assist the Court because
of
its expertise on or interest in the matter before the Court. It
chooses the side it wishes to join unless requested by the Court
to
urge a particular position."
Rule 16A allows for the opportunity of
the broadening of the scope of the litigation and invites parties
with a “legitimate”
interest in the outcome to
participate to the extent that they may raise matters not already
before the Court and also protect
the interests of those parties on
whose behalf they have been admitted as friends of the
Court. See Phillips v SA Reserve Bank &
others
2013 (6) SA 450
(SCA) para 31; Children’s Institute v
Presiding Officer, Children’s Court, Krugersdorp, & others
2013
(2) SA 620
(CC).
19. In response, Mr Janisch pointed out
that the applicant had indeed complied with Rule 16A and that such
notice was posted on
the notice board on 21 August 2014, being the
same day on which papers in this matter were issued out of this
Court. This could
not be disputed by the respondents and on that
basis the first point raised by the respondents falls away. There has
been no application
for any other party to be admitted as amicus, nor
has this Court received any written submission from any interested
party. The
matter falls accordingly to be decided on the basis of the
documents and written submissions before me.
20. The second point in limine is that
as the applicant operates premises which would appear to fall foul of
the provisions of s
48(5)(e) of the KZN Act, it ought to have applied
for a temporary amnesty, provided for in Regulation 47. The
contention of the
respondents is that this application to review and
declare Regulation 47 unconstitutional is premature in that had the
applicant
applied for amnesty, it may well have been granted. As
such, the respondents contend that the applicant has failed to
exhaust its
internal remedies as required in terms of s 7(2) of the
Promotion of Administrative Justice Act 3 of 2000 (PAJA). It is
further
contended that the applicant has failed to exhaust the
provisions of s 61 of the KZN Act.
21. The applicant denied that its
application was premature and submitted that an application for
temporary amnesty in terms of
Regulation 47 is not an internal
remedy. It is an avenue followed by a licence holder who recognises
that he is non- compliant
and asks for a temporary reprieve to get
his affairs in order. I agree with the argument of the applicant,
particularly as the
import of Regulation 47 is only to provide a
temporary reprieve for a non-compliant licence holder, until he
applies to have his
licence transferred to new, compliant premises.
It is no solution to the problem, and hence cannot be construed as a
“remedy”.
In addition, it would make no sense, nor would
it be logical, for the applicant to utilise the provisions of
Regulation 47, the
very mechanism which it contends has no place in
the regulatory framework.
22. In so far as the provisions of s 61
of the KZN Act are concerned, sub-section
(1) provides for an appeal by a person
“affected by a decision taken by the Liquor Authority and who
wishes to appeal against
the decision”. In the matter before
me, there is no evidence of a “decision" taken by the
liquor authority, adverse
to the interests of the applicant. The
applicant's complaint in this matter lies against a legislative
provision of the KZN Act,
and not a decision of the Liquor Authority.
As such, I find no basis for the application of s 61, or for it to be
considered as
an internal remedy in the context of s 7(2) of PAJA.
23. Accordingly, I find no merit in the
preliminary points raised by the respondents. I now proceed to deal
with the merits of the
application.
24. As set out earlier, the outcome of
this application hinges on an interpretive dispute between the two
parties on either side
of the regulatory framework. Counsel for the
applicant's contention that s 48(5)(e) does not apply to pre-existing
licence holders
is premised on an interpretation of the language used
in the transitional provisions, found in s 101 of the KZN Act. In
particular,
it was contended that every licence acquired under the
1989 Act was, upon that Act ceasing to operate, a licence in terms of
the
new KZN Act, subject to certain formalities which included the
payment of certain prescribed fees.
25. In substantiation of this argument
Mr Janisch placed much emphasis of the wording of sub-section 1(a)
which states that every
licence in force immediately prior to the
commencement of the KZN Act would be recognised as a licence upon the
date of its commencement.
In so far as the respondents contention
that holders of pre-existing licences do not have a “free pass”
and do not
acquire immunity from the provisions of the KZN Act,
counsel for the applicant contended otherwise, and submitted that the
legislature
specifically excluded pre-existing licence holders from
having to comply with the application procedure contained in Chapter
6
of the Act, of which s48 forms part thereof. In this regard, the
applicant relied on the precise wording contained in s 101 (2)(a)
of
the Act which states that:
„(2)(a) The holders of the
licences, approvals, notices and determinations referred to in
subsection (1) are entitled to a
licence certificate or permit in
terms of section 62 of this Act for the relevant category of licence
as contemplated in section
39, without having to comply with the
application procedure for such a licence or permit contemplated in
Chapter 6." (my underlining)
26. The applicant submitted that the
use of the word “entitled” in sub-section
(2) (a) above could only have been used
to convey an entitlement to a licence under the KZN Act, without
anything more on the part
of the licence holder. This argument
appears to be strengthened when regard is had to the wording employed
in the section that
a holder of a licence is entitled to a licence
under the new Act “without having to comply with the
application procedure".
This argument is amplified when regard
is had to the wording in s 101(3)(a) which also provides that licence
holders under the
1989 Act “must receive a licence or
certificate or permit upon presentation to the Liquor Authority of
proof of their pre-existing
licences and after payment of the annual
fees prescribed in the Act. The effect of this, it was submitted, was
that upon the issuance
of a licence, the holder thereof is “permitted
to commence trade forthwith" (see s 63(3)).
27. The applicant's argument, as I
understood it, was that s 101(2)(a) prescribes a route that
pre-existing licence holders are
required to follow in order to
validate or perfect their old licences under the KZN Act by simply
following the administrative
procedures set out, and on the payment
of certain prescribed fees. According to the applicant, s 101(2)(a)
exempts it from having
to comply with the procedures set out in s 48,
which are applicable only to applicants for new licences. On this
basis, the liquor
authority has no discretion but to issue a licence
to a pre-existing licence holder. Counsel for the applicant submitted
that the
language used in s 101(3)(a) does not permit the liquor
authority any room to reconsider the application or to impose
additional
or new standards, such as that contained in s 48(5)(e) of
the Act. As set out earlier, much emphasis was placed on the
peremptory
language used in s 101(3)(a). If it was the intention of
the legislature that a pre-existing holder of a licence had to
undergo
the same scrutiny and be subjected to the same standard of
compliance as a new applicant, it was submitted by the applicant that
the legislature would have stated this much in the Act. On the
contrary, it expressly, on the applicant's version, exempts
pre-existing
holders from the application process set out in Chapter
6 of the Act.
28. On the applicant's version, if on
an interpretation of s 101(2)(a) it is found that the applicant was
not required to comply
with the application procedure set out in
Chapter 6 of the Act, then the only conclusion that this Court can
reach is that pre¬existing
liquor licence holders are not bound
by the provisions of s 48(5)(e). In developing this argument further,
Mr Janisch stressed
that the section uses the word “application”,
which must suggest that the section only applies to the procedure to
be followed in determining the applications for new licences. I do
not agree with this submission. To do so would be to accept
unreservedly the contention that the applicant, as a pre-existing
licence holder, is not bound by the provisions of the KZN Act
to the
extent that it imposes conditions not existent under the 1989 Act.
While it is correct that s 48 does not refer to existing
licence
holders and only refers to an “application” which must be
considered by the liquor authority, it cannot be
said that on this
basis alone the legislature intended to exclude all pre-existing
holders from complying with the provisions of
s 48, particularly
where the terms and conditions of their pre-existing licence differs
from the current regulatory regime. An
“applicant’, as
used in the section, could refer to either category of person seeking
a licence - new or pre-existing
under the
1989 Act.
29.
Section 48(7) provides that:
,A liquor licence issued to a licencee
where the provisions as contemplated in section 41(2)(f)\ section
41(2)(i)\ or section 41(2)(j)
are met, then such licence remains
valid until such time as the consent contemplated in the said
sections are either withdrawn
or revoked by the persons authorised to
do so."
It must follow therefor that licences
are not issued for specified periods and are not subjected to
scrutiny at the time of renewal,
as is the case in other countries.
Even where renewals are required, courts have taken the view that
those applying to renew their
licences should not be subjected to the
same degree of scrutiny as new applicants. In this regard James J.
Leonard, Liquor License-Privilege
or Property?, 40 Notre Dame L. Rev.
203 (1965) where at 215, the author states the following:
„Most courts seem to take the
position that there is no continuing interest in a liquor license.
That is, in the absence of
statutory provisions to the contrary, the
former holder of a license has no rights different from those of any
other person when
applying for renewal of his license, and, upon
expiration, the holder is not entitled to renewal as a matter of
right. However,
at least one federal court and a number of
Pennsylvania courts take the position that the discretion of an
administrator should
not be as broad in refusing renewal of a license
as it is in passing upon the original application and, by
implication, that there
is a continuing right in a liquor license.
Preference for a holder over an applicant would seem just in the
light of the substantial
investment which the holder has made."
(footnotes omitted)
30. According to the respondents, the
interpretation that s 101 (dealing with licences under the 1989 Act
and their conversion or
validation under the KZN Act) must be read in
the context of sub-section 1(a)(ii) which states that licences
acquired under the
Liquor Act and in force before the commencement of
the KZN Act, would continue to remain in force provided that the
“terms
and conditions and trading days and trading hours are
not inconsistent with the provisions of this (KZN Liquor) Act."
In the
event that they are inconsistent with the “terms and
conditions" of the KZN Liquor Act, sub-section (1)(a)(iii)
provides
that “the provisions of this Act are applicable”.
31. Mr Dickson contended that this
interpretation favoured an application of s 48(5)(e) to all liquor
licences - whether pre-existing
or new - and created as an absolute
prohibition the operation of liquor retail outlets within a 80m
radius of a school or place
of worship. It was further contended that
the use of the words “terms and conditions" in s 101 must
entail a reference
to the licenced premises from which liquor is
sold. This section suggests that where the terms and conditions of a
licence acquired
under the national Liquor Act are inconsistent with
the provisions of the new KZN Act, then the provisions of the latter
must apply
(see s 101 (1 )(a)(iii)).
32. Counsel for the applicant countered
this argument by reference to s 62, dealing with the conditions
precedent for a licence
to be issued. Section 62(1 )(a) draws a
distinction between “the premises in respect of which a licence
or permit has been
granted” (see s 62(1 )(a)(iii)) and “the
terms and conditions upon which the licence or permit was granted”
(see
62(1)(a)(iv)). It was contended that the words “terms and
conditions" could never have been used in the KZN Act to refer
to the licenced premises, and in any event would be non-sensical for
the liquor authority to issue a licence on condition that
that the
applicant is not permitted to trade thereat. A licence cannot be
granted without a reference or attachment to licenced
premises (see s
62(1 )(a)). It was not in dispute that a licence attaches to
particular premises, which must be set out in the
application to the
liquor authority.
33. It was argued by the applicant that
“terms and conditions" could include restrictions on the
age of persons to whom
alcohol could be sold, and other similar
provisions, but could not be interpreted as a reference to the
“premises”
from where liquor was to be sold. There is
much to be said for the argument of the applicant however, I am of
the view that this
is too narrow an interpretation of the KZN Act. In
my view, the words “terms and conditions" as used in s
101(1 )(a)(iii)
must be given a wider meaning, and not be
compartmentalised to focus on only some aspects of the licence. The
question to be asked
is whether the pre-existing licence complies in
all respects with the provisions of the KZN Act. If not, the
provisions of the
KZN Act must apply.
34. The applicant further contended
that what the KZN Act established was a two tier application process,
one for those with pre-existing
liquor licences and one for new
applicants. According to the applicant, it is only the latter
category that was obliged to comply
with the restriction imposed in s
48(5)(e). In substantiation of this two-tier approach, counsel
referred to the provisions of
s 95 which specifically entrenches the
right of pre-existing licence holders located at service stations.
The section provides
that:
..Service stations
(1) No person may sell liquor in a
convenience store franchised to a service station selling petrol,
diesel or other petroleum products
to the public.
(1A) The provisions of subsection (1)
do not apply to convenience stores licensed to sell liquor before the
coming into operation
of this Act.
[Subsec (1 A) inserted by section 5 of
Act 3 of 2013 w e f 13 February 2014.]"
35. With reference to s 95(1 A), it was
contended that this was clearly a legislative response to an outcry
from service station
owners who complained that their pre¬existing
licence to sell liquor had been unfairly interfered with by the
legislature.
While the KZN Act came into operation on 1 August 2012,
the amendment contained in sub-section (1A) came into operation much
later
on 13 February 2014. I am unable to agree with the applicant's
contention that its position is no different from that of a
convenience
store at a service station. The legislature deemed it
prudent, for whatever reason, to pass the amendment in sub-section (1
A).
This Court has no idea what prompted that approach. What is clear
though is that this particular exemption was only granted to service
stations. No case has been made out before us for unfair
discrimination or disparate treatment between different categories of
retail outlets or licence holders.
36. While s 95(1 A) allows a
convenience store franchised to a service station to continue selling
liquor as it had under the 1989
Act, Mr Dickson disputed that this
entailed that service stations were exempt from the strictures
contained in s 48(5)(e) of operating
within 500m of a school or
religious institution. Even if he is wrong with regard to the blanket
prohibition argument that s 48(5)(e)
applies to all retail liquor
licence holders, this still does not assist the applicant in terms of
its two-tier approach, based
on a distinction in the way that the
liquor authority is obliged to treat pre-existing and new licence
holders.
37. What s 95(1A) does, in my view, is
to allow stores at service stations who sold liquor under the 1989
Act to continue doing
so under the new Act. New stores, established
after the coming into operation of the KZN Act may not sell liquor.
That constitutes
an absolute prohibition, and on my interpretation,
irrespective of how far the service station is located from a school
or religious
institution. The reason for this, I would assume, has
nothing to do with the “community considerations" alluded
to earlier
as the rationale for s 48(5)(e). On the contrary, it has
everything to do with fighting the scourge of drunken driving. One
way
of doing this is to keep alcohol as far away from motorists. As I
have stated earlier, the reason of why s 95(1 A) was enacted is
not
before this Court. I am not convinced of the applicant's reliance on
this provision for its contention that the legislature
intended to
differentiate in the way it considered pre-existing licence holders
from new applicants for the purposes of the application
of s
48(5)(e).
REGULATION 47
38. Accordingly, the applicant
submitted that if I were to accept its argument that s 101, read with
s 48(5)(e), did not apply to
pre-existing licence holders, then
Regulation 47 which provided for temporary amnesty for licence
premises situated within an area
of a 500m circumference from
learning and religious institutions, had no application to
pre-existing holders, that it served no
rational purpose and should
accordingly be struck down.
39. Counsel further contended that
Regulation 47 was an example of “regulatory overenthusiasm”,
and has been made without
any legislative of authority contained in
the enabling Act, and without rational purpose. To this extent, it
was submitted that
Regulation 47 offends the principle of legality
and falls to be declared invalid in terms of s 172 (1 )(a) of the
Constitution.
40. In response, the respondents
contend that the KZN Act specifically gives the first respondent the
power to make regulations,
and specifically the manner and form in
which an application for temporary amnesty must be made (see s 99(1
)(q)). Moreover, s
99(1 )(x) is wide enough, in my view, as a
catch-all provision allowing the first respondent to make Regulation
47.
41. It was further contended even if
the applicant succeeds in this application, the principle of
avoidance should apply and this
Court should allow the Regulation to
remain intact in as much as it does not impinge on the rights of the
applicant, who would
have succeeded in achieving the relief it
sought. As I understand the principle, Courts should defer as much as
possible in respect
of policy matters, to the executive and
legislative arms. The principle further dictates that remedies should
be first found in
the common law or legislation which must be
interpreted or developed in a manner consistent with the
Constitution. Direct constitutional
remedies should be a last resort,
unless the interests of justice dictate otherwise. See Nyathi v MEC
for the Department of Health,
Gauteng & another
2008 (5) SA 94
(CC) at 144 where the Constitutional Court affirmed the
well-established principle that where it is possible to decide a
case,
civil or criminal, without reaching a constitutional issue,
that route should be followed. This principle was affirmed in Zantsi
v Council of State, Ciskei, & others
[1995] ZACC 9
;
1995 (4) SA 615
(CC) para 4
where Chaskalson P said:
Jt is only where it is necessary for
the purpose of disposing of the appeal, or where it is in the
interest of justice to do so,
that the constitutional issue should be
dealt with first by this court. It will only be necessary for this to
be done where the
appeal cannot be disposed of without the
constitutional issue being decided; and it will only be in the
interest of justice for
a constitutional issue to be decided first,
where there are compelling reasons that this should be done.. . . In
view of the far-reaching
implications attaching to constitutional
decisions, it is a rule which should ordinarily be adhered to by this
and all other South
African Courts before whom constitutional issues
are raised."
42. Counsel for the respondents
submitted further that no good reason existed for the Court to strike
down Regulation 47, particularly
if the applicant were to be
unsuccessful in this application. In that event, as the opportunity
for temporary amnesty would apply
to the category of holders to which
the applicant belongs, it could well be the only life-line available
to apply for amnesty while
it prepares to bring an application to
relocate its premises to a location complainant with s 48(5)(e). For
reasons which follow,
it is not necessary for me to delve any further
into the issue of the constitutionality of Regulation 47.
43. The respondents argued that the
weakness in the applicant's case is that it maintains that its liquor
licence acquired under
the 1989 Act constitutes a vested right which
cannot be changed or altered by the regulatory authority responsible
for issuing
the licence. Mr Dickson submitted that the Liquor Bill
case affirmed the prerogative of the provincial governments to
formulate
their own regulatory regime when considering whether to
grant liquor licences. In so doing, the Constitutional Court accepted
that
the provincial governments could take into account “community
considerations". The contention of the applicant is that
it has
a licence which allowed it to operate as a retail liquor outlet, even
though it is located within a 80m radius of a school
or place of
worship. That right to trade, it contends, cannot be interfered with,
even by the regulatory authority.
44. The respondents attacked the
contention that the legislature intended creating a two-tier approach
towards the regulation of
liquor licences. To do so, it contended,
would be highly inequitable and result in a “super class”
of licence holders
whose rights were forever immune from interference
by the provincial government and the Liquor Authority. It bears
noting that
the Constitutional Court in Shoprite Checkers supra para
68 recognised that a licence has value, is capable of being
transferred
and is sufficiently permanent. The “benefits”
of remaining in a location inconsistent with s 48(5)(e) could, in
theory,
endure perpetually. A licence could be sold or transferred,
with the applicant or its successor in title retaining the benefit of
additional trading hours and days (s 78, Schedule 3) but still
operating within a 80m radius of a school or religious site.
45. Practically, if I were to find in
favour of the applicant, it would have the effect that 12 of its
stores could operate in a
manner inconsistent with the prevailing
norms and standards set by the provincial government for the
regulation of retail liquor
trade. In the Liquor Bill case para 56
the Constitutional Court said the following about a liquor licence:
„ ...a liquor licence is the
permission that a competent authority gives to someone to do
something with regard to liquor
that would otherwise be unlawful. The
activity in question, as emerges from the judgment of Innes J, is
usually the sale of liquor
at specified premises. It also seems to me
that the term “liquor licences” in its natural
signification encompasses
not only the grant or refusal of the
permission concerned, but also the power to impose conditions
pertinent to that permission,
as well as the collection of revenue
that might arise from or be attached to its grant."
46. Justice Froneman, writing for the
majority in Shoprite Checkers supra, on whether a liquor licence
constituted property, observed
at para 58 that:
,A liquor licence is thus an
entitlement to do business that would otherwise have been unlawful.
The competence to do this kind
of business originates from state
approval and its continuance is dependent on state powers of
amendment, cancellation and regulation."
On the issue of whether a liquor
licence constituted property, Moseneke DCJ stated the following at
para 122:
,A licence is a bare permission to do
something that would otherwise be unlawful. It is normally issued to
overcome a statutory
prohibition. Further, licences are subject to
administrative withdrawal and change. They are never absolute, often
conditional
and frequently time-bound. They are never there for the
taking, but instead are subject to specified pre-conditions."
47. In the article Liquor
License-Privilege or Property? supra at 203 the point is made that
when faced with a problem involving
a liquor license, most courts
start with the premise that such a license is a governmental grant
which authorizes the grantee to
engage in a business which would
otherwise be unlawful. Counsel for the respondents correctly
submitted there is no right contained
in the Constitution to sell
liquor. This is borne out by the view expressed in Crowley v
Christensen
137 U.S. 86
(1890) where it is stated at 91 that:
„There is no inherent right in a
citizen to thus sell intoxicating liquors by retail. It is not a
privilege of a citizen of
the state or of a citizen of the United
States."
48. Having regard to the nature of the
“entitlement” to hold a liquor licence, I do not agree
with the applicant's contention
that pre-existing liquor licence
holders" right to trade is exempt from compliance with the
provisions of s 48(5)(e) of the
KZN Act. Numerous aspects of our
lives are subjected to regulation. Recent amendments have been
effected to provide for the renewal
of motor vehicle licences, with a
proviso that the person doing so must provide proof of residence.
Failure to do so will result
in the motor vehicle licence lapsing.
Similarly, when the Department of Transport decided on the issue of
new “credit card”
sized driver's licences, all licenced
drivers were required to apply for the new licence. An added
requirement was that each applicant
was to undergo an eye test.
Failure of the eye test resulted in the licence not being re-issued.
This had the effect of a revocation
for a failure to comply with the
new standards imposed by the regulatory authority. The requirement
was probably aimed at ensuring
greater road safety. In the same way,
banks require proof of residence of their customers by the production
of a utility statement
or similar proof mandated by the
Financial
Intelligence Centre Act 38 of 2001
. Failure to do so would result in
one not being able to transact using one"s bank account or
credit card. In the same way,
mobile phones can be suspended on the
basis that a subscriber has failed to furnish proof of his or her
residence as required in
terms of the Regulation of Interception of
Communications and Provision of Communication-Related Information Act
70 of 2002. Examples
of recent regulatory incursion can also be found
in relation to firearm licences. The state decided to amend the
Firearms Control Act 60 of 2000
to restrict the number of hand-guns
owned by an individual to two. It then required all gun owners to
hand in their firearms to
the state, after which all licensees were
required to undergo a written competency test. This amendment was no
doubt aimed at reducing
the number of illegal firearms which
contributed directly to the high crime rate in our country. However,
in the event of an existing
firearm licence holder failing the
competency test, he or she was precluded from possessing a firearm in
terms of the
Firearms Control Act. There
are numerous analogies where
rights which we may have exercised for years without interruption,
are now made subject to compliance
with new conditions.
49. The respondents contend that they
are not interfering with or retarding the applicant's right to trade,
the only hurdle that
the applicant must satisfy is that its premises
are located outside of a 80m radius from a school or place of
worship. Similarly
to liquor, there is no constitutional guarantee to
possess a firearm. It is a grant of permission by the state which
would render
possession otherwise unlawful.
50. On a proper reading of the KZN Act,
I am of the view that s 48(5)(e) applies as an absolute prohibition
against all retail liquor
licence holders, inclusive of new
applicants and those who acquired licences under the 1989 Act. The
new provisions in the KZN
Act allow the liquor authority to regulate
the retail industry from an even playing-field, without one category
of holders able
to ply their trade in the proximity of learners,
despite the state"s efforts to create an enabling environment
for future
generations to achieve the aspirational values in our
Constitution of improving the quality of life for all citizens and to
free
the potential of each person.
51. In light of the above, I find that
s 101 read with s 48(5)(e) per se prohibits and renders it unlawful
for a person to sell
or continue to sell liquor for consumption off
licenced premises (being either a liquor or a grocers" store)
where such premises
are within a circumference of 500m from a
learning institution and/or a religious institution, and that the
prohibition applies
equally to new applicants for licences as well as
to persons granted licences under the 1989 Act.
Arbitrary deprivation of property?
52. Having arrived at the above
conclusion, I am required to consider the applicants argument that
the prohibition in s 48(5)(e)
to its 12 outlets would result in an
arbitrary deprivation of its property in contravention of s 25(1) of
the Constitution. The
applicant relied on the decision of Smith J in
Shoprite Checkers (Pty) Ltd v MEC for Economic Development,
Environmental Affairs
and Tourism: Eastern Cape & others
[2015] 1
All SA 239
(ECG) that a liquor licence constitutes property for the
purposes of the Constitution and that a blanket prohibition on the
sale
of liquor from premises within a circumference of 500m of a
school or place of worship would constitute a deprivation and would
be arbitrary (see too Mkontwana v Nelson Mandela Metropolitan
Municipality & another
2005 (1) SA 530
(CC).
53. The Constitutional Court in
Shoprite Checkers recognised that in light of the public law origin
of a liquor licence, it does
not fit easily into a private law
conception of rights and property. The Court at para 70 confirmed the
High Court's finding that
a grocers" licence to sell wine under
the 1989 Act constituted property. Importantly, the Court noted that
although the holders
of grocer"s wine licences finally lost the
right to sell wine and groceries on the same premises, the Eastern
Cape Government
had ..softened the hurt" by allowing those
affected to apply for a conversion of that right which now would
allow the sale
of all kinds of liquor, although not on the same
premises as the grocery business. Although there was a loss of “some
legal
entitlement”, the Court at para 76 reasoned that in the
“greater scheme of things it was not too much”, but
enough
to constitute a deprivation under s 25(1) of the Constitution.
54. In the matter before me, Mr Dickson
argued that the liquor licence did not constitute property. That
contention has now been
denuded by the finding of the Constitutional
Court. However, even if the licence did constitute property, counsel
for the respondent
submitted that s 101 read with s 48(5) did not
deprive the applicant of its right to property. It was open to the
applicant to
sell its premises or relocate to a compliant site. The
Constitutional Court in Shoprite Checkers, with reference to FNB
(supra)
held at para 77 that:
FNB held that a deprivation of property
is arbitrary when the law does not provide sufficient reason for the
deprivation or when
it is procedurally unfair. A “complexity of
relationships” must be considered in determining whether
sufficient reason
has been provided. The eventual standard can range
from rationality to proportionality. In Mkontwana, the Court stated
that the
lighter standard may be applicable if the nature of the
right to property is not strong and the deprivation not too heavy."
(footnotes omitted)
55. Applying the above standard, I am
of the view that the implication of the applicant having to comply
with the provisions of
s 101 and 48(5)(e) of the KZN Act may entail a
degree of hardship, but this does not equate to an “arbitrary
deprivation”
required for a successful challenge in terms of s
25(1) of the Constitution. This finding is bolstered by the views in
para 83
of Shoprite Checkers that the regulatory change brought about
by the legislature in the Eastern Cape:
.. did not extinguish any fundamental
rights of holders of grocer"s wine licences or fundamental
constitutional values. Rationality
would thus be sufficient reason to
avoid a finding of arbitrariness. ...The same applies to the
justification of ensuring that
questions of control and exposure to
the sale of liquor in a grocery store are ameliorated. ... Opinion
may also be divided on
whether children are worse off by being
exposed to the sale of wine in a grocery store than being in the
vicinity of premises where
only liquor is sold."
56. The measures adopted in the Eastern
Cape were an attempt by the provincial government to control or limit
the exposure of liquor
in grocery stores, to which children would
have access. For the purposes of this decision, it is not necessary
to consider in any
detail the rationale behind the adoption of the
policy. Matters of policy are issues best left for the legislature,
which is given
a wide discretion in selecting the means to achieve
its constitutionally permitted objectives (see Albutt v Centre for
the Study
of Violence and Reconciliation, & others
2010 (3) SA
293
(CC)). Indeed, counsel for the applicant herein made it
abundantly clear that the applicant was not concerned with the
motivation
behind the adoption of the measures contained in s
48(5)(e). It simply sought a ruling that it was not bound to follow
the provisions
of s 48(5). On that basis, and in the absence of some
glaring disparity, the Court must assume that the means employed by
the legislature
of prohibiting liquor outlets within a 80m radius of
a school or religious institution, was rationally related to the
objective
of not tempting children, especially in poorer communities,
from experimenting with liquor, and consequently contributing towards
absenteeism at school, as well as other related problems.
57. In the result, I am satisfied that
although the applicability of the prohibitions contained in s
48(5)(e) of the KZN Act constitute
an interference with, and a
diminution of, the applicant's vested right to trade as a licenced
holder in premises from which it
has been operating for some
considerable time, and in respect of which it may have invested in
terms of its development, the legislative
measures imposed by the
respondents do not strip it of its right to trade. As counsel for the
respondents correctly pointed out,
it simply requires the applicant
to continue with its right to trade, but from a different premises.
Costs
58. With regard to costs, the applicant
has been unsuccessful in all aspects of the relief sought. In the
event that it prevailed,
the applicant sought costs of two counsel.
In dealing with costs, Mr Dickson submitted that the respondents
should be granted costs,
but at the same time recognised the
application of the Constitutional Court decision in Biowatch Trust v
Registrar, Genetic Resources,
& others
2009 (6) SA 232
(CC) to
the present matter. While the applicant sought to challenge the
applicability of the KZN Act to its pre-existing licences,
and
failed, the matter also concerned the secondary aspect of whether the
application of the KZN Act resulted in an arbitrary deprivation
of
property. That, in my view, would be sufficient to invoke the
approach of the Courts towards costs were a “constitutional
issue” arose. In Affordable Medicines Trust & others v
Minister of Health & another
[2005] ZACC 3
;
2006 (3) SA 247
(CC) para 139, the
Constitutional Court held that as a general rule in constitutional
litigation, an unsuccessful litigant in proceedings
against the state
ought not to be ordered to pay costs. Ngcobo J said the following:
„The award of costs is a matter
which is within the discretion of the Court considering the issue of
costs. It is a discretion
that must be exercised judicially having
regard to all the relevant considerations. One such consideration is
the general rule
in constitutional litigation that an unsuccessful
litigant ought not to be ordered to pay costs. The rationale for this
rule is
that an award of costs might have a chilling effect on the
litigants who might wish to vindicate their constitutional rights.
But
this is not an inflexible rule. There may be circumstances that
justify departure from this rule
such as where the litigation is
frivolous or vexatious The ultimate goal is to do that which is just
having regard to the facts
and the circumstances of the case. In
Motsepe v Commissioner for Inland Revenue this Court articulated the
rule as follows:
“[0]ne should be cautious in
awarding costs against litigants who seek to enforce their
constitutional right against the State,
particularly, where the
constitutionality of the statutory provision is attacked, lest such
orders have an unduly inhibiting or
“chilling” effect on
other potential litigants in this category. This cautious approach
cannot, however, be allowed
to develop into an inflexible rule so
that litigants are induced into believing that they are free to
challenge the constitutionality
of statutory provisions in this
Court, no matter how spurious the grounds for doing so may be or how
remote the possibility that
this Court will grant them access. This
can neither be in the interest of the administration of justice nor
fair to those who are
forced to oppose such attacks."”
59. The issues raised by the applicant
cannot be described as either frivolous or vexatious. The applicant
raised an issue which
would not only have an impact for the operation
of 12 of its outlets, but by all accounts the decision in this
application would
have implications for hundreds of other liquor
licence holders currently operating in a manner that is inconsistent
with the policy
articulated by the provincial government in s
48(5)(e). The applicant has not sought to merely label the litigation
as constitutional
as a means of avoiding the implication of costs. In
fairness to Mr Janisch, he merely asked for costs of two counsel in
the event
of the applicant being successful. No argument was
addressed to me on costs in the event of the application failing.
Counsel probably
accepted that the usual rule relating to costs in
civil cases would apply. However, as the Court noted in Biowatch
supra para [25],
I am satisfied that the issues raised by the
applicant were “genuine and substantive, and truly raised
constitutional considerations
relevant to the adjudication”. In
Biowatch para 28, and appropriately in the context of the issues
raised in the matter before
me, the Court considered the approach
towards costs where state regulation is challenged. The Court held:
..Constitutional issues are far more
likely to arise in suits where the state is required to perform a
regulating role, in the public
interest, between competing private
parties. One thinks of licences, tender awards, and a whole range of
issues where government
has to balance different claims made by
members of the public. Usually, there will be statutes or regulations
which delineate the
manner in which the governmental agencies
involved must fulfil their responsibilities. ...In essence the
dispute turns on whether
the governmental agencies have failed
adequately to fulfil their constitutional and statutory
responsibilities. Essentially, therefore,
these matters involve
litigation between a private party and the state, with radiating
impact on other private parties. In general
terms costs awards in
these matters should be governed by the over-arching principle of not
discouraging the pursuit of constitutional
claims...."
In light of the above, and in the
exercise of my discretion, I am satisfied that each party should pay
its own costs.
Order
The following order is made:
The application is dismissed.
There is no order as to costs.
JUDGE M R CHETTY
Appearances:
For the First Applicant: Adv. M W
Janisch & G A Du Toit
Instructed by Venns Attorneys
Pietermarizburg- 033 355 3175
For the First Respondent: Adv. A J
Dickson SC
Instructed by PKX Attorney
Pietermaritzburg - 033 347 5354
Date of hearing: 4 June 2015
Date of judgment: 20 November 2015