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[2011] ZAFSHC 200
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Targazest (Pty) Ltd v Vrystaat Dobbel en Drankowerheid en Ander (5034/2011) [2011] ZAFSHC 200 (8 December 2011)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Case No. : 5034/2011
In
the matter between:-
TARGAZEST
(PTY) LTD
….......................................................
Applicant
and
VRYSTAAT DOBBEL EN
DRANKOWERHEID
….......
First
Respondent
DIE
VOORSITTER VAN VRYSTAAT
DOBBEL EN
DRANKOWERHEID
…......................
Second
Respondent
_____________________________________________________
JUDGMENT BY:
KRUGER, J
_____________________________________________________
HEARD ON:
1
DECEMBER 2011
_____________________________________________________
DELIVERED ON:
8 DECEMBER 2011
_____________________________________________________
[1] The applicant
requests the court to authorise it to sell liquor pending
consideration of its application for a registration
certificate for a
restaurant by first and second respondents. The second respondent is
the chairperson of the first respondent.
This is an application in
terms of section 7 read with section 6(2)(g) of the Promotion of
Administrative Justice Act, 3 of 2000
(“PAJA”). The
interim relief which applicant seeks until its application can be
considered by the first respondent,
is the granting of temporary
relief as contemplated in section 8(1)(e) of PAJA.
[2] The applicant
submitted an application for a restaurant registration certificate in
terms of section 27 read with section 31
of the Free State Gambling
and Liquor Act, 6 of 2010, (“the Act”). On 5 August 2011
the applicant’s attorney
wrote a letter enquiring about the
progress with the application and whether the reports of the
designated police officer and the
municipal and liquor inspector had
been requested as prescribed by section 31(3) of the Act, stating
that the matter was extremely
urgent. No response was received.
[3] On 2 November 2011
the attorney wrote another letter to the first respondent, stating
that the restaurant was to open in the
month of November and that a
restaurant of its magnitude could not be opened without having a
liquor licence. In the letter the
attorney again states that he has
not received the reports of the municipality, liquor inspector and
designated police officer
which in terms of the regulations under the
Act must be requested by the first respondent within seven days of
the lodgement of
the application. In his letter of 2 November the
applicant’s attorney states that he has been instructed to
apply for a special
events registration, but that first respondent
decided that a special events registration certificate could not be
issued in these
circumstances. The respondents did not reply to that
letter.
[4] On 11 November 2011
applicant’s attorney sent an e-mail to the first respondent,
stating that applicant intends opening
on 28 November 2011 and that
applicant will have to launch a court application. No response was
received from the first respondent.
[5] On 15 November 2011
applicant’s attorney sent a further e-mail to the first
respondent, stating that the Liquor Board
had held a meeting on 10
and 11 November 2011 and that applicant’s application was not
dealt with at that meeting despite
the fact that first respondent had
repeatedly been informed that the application is extremely urgent. No
response was received.
[6] On 18 November 2011
the applicant caused this application to be issued by the registrar
and set it down for hearing on 24 November
2011. The respondents were
given six days notice (the application was served on 18 November
2011), but the notice of motion stipulated
no time for the noting of
defence or filing of the answering affidavit.
[7] On 23 November the
respondents gave notice of their intention to oppose. On 24 November
an unsigned affidavit was given to the
applicant and on 25 November
the answering affidavit was filed. On 24 November the matter was by
agreement postponed to 1 December,
the applicant to file its replying
affidavit by Monday 28 November.
[8] The answering
affidavit is made by the second respondent, the chairperson of the
first respondent. He takes a number of points
in limine
:
(1) Lack of urgency;
(2)
Locus standi
;
(3) Non-joinder.
[9] On the merits the
second respondent’s main argument is that there are serious and
fatal flaws in the application, which
make it impossible for the
first respondent to consider it:
(i) The lodgement fee for
a restaurant licence application is R2 500,00, but the applicant paid
only R1 500,00.
(ii) In the advertisement
the applicant describes the premises as Erf 6721, Shop F18, Preller
Square Shopping Centre, whereas in
the motivation the description is
Erf 7621, Shop F18, Preller Square. The Erf number differs.
Respondent says the location is unknown
because of this discrepancy.
Section 31(2)(b) of the
Act stipulates that the application is to be accompanied by building
plans of the premises as approved
by the municipality. Second
respondent says there is no approval stamp on the plans lodged with
the application.
According to the papers
filed with the registration application, the deponent to the
founding affidavit is not a director of the
applicant. This evokes a
defence of lack of
locus standi
from the respondents.
Second respondent says
all these difficulties need to be addressed since they are factors
which could influence the first respondent
to refuse the application.
[10] The second
respondent says they are not refusing or neglecting to hear the
application, but they do not have all the required
information. The
respondents do not say when they requested the reports of the police,
the liquor inspector and the municipality.
The applicant says they
only requested those reports after the court application was served
on them.
[11] The second
respondent says there is a backlog of licences it has to process and
section 17 of the Act limits its sittings to
12 per year. He says the
first respondent’s first sitting only took place in October
2010 and this Board inherited an almost
insurmountable backlog of
liquor licence applications dating as far back as 2004. The second
respondent says:
“
9.4.7 Even
though the Act limits the first respondent’s sittings to 12 per
year because of the backlog there has sometimes
been sittings twice a
month. A further problem is that first respondent’s members are
specially selected experts with other
jobs who are not all from
Bloemfontein and have to travel to Bloemfontein for the meetings and
be paid by the tax-payers for their
attendance at such meetings. Some
of them are in full-time employment of for instance the Municipality
and it really takes effort
and money to coordinate these meetings.
9.4.8 The applicant, as stated, has
created its own urgency. If the first respondent allows one applicant
to jump the queue it will
only exacerbate the backlog of more than
700
applications while it is doing its utmost to try to clear
the said backlog.”
[12] The second
respondent attaches a list of applications heard since October 2010.
1210 matters were heard and 273 liquor applications
were approved in
that period. It seems as if many applications are still under
consideration. The second respondent does not say
how many
applications have been disposed of. Second respondent says about 733
applications are awaiting consideration by the first
respondent. He
says there is a huge backlog and that every application forming part
of that backlog is in the same position as
applicant, which
underlines the fact that an “opportunistic application”
such as the present “serves to prejudice
and delay the
consideration of all the other older applications of which the
applicants may not have the money to approach court
as this applicant
did.” He says:
“
9.6.1 It is
correct that the deponent Mr
Burger
frequently provided the first respondent with lists of outstanding
applications on which this applicant’s application for
a liquor
licence also appears, such as annexure ‘D’ to the
founding affidavit. I submit with respect that these lists
merely
serve to illustrate the point that there is a huge backlog and that
every application on that backlog is in the same position
as the
present applicant and merely serves to underline the fact that such
opportunistic applications as this one serves to prejudice
and delay
the consideration of all the other older applications of which the
applicants may not have the money to approach court
as this applicant
did.”
[13] The second
respondent says applicant’s application could not be dealt with
at the board’s meeting on 9 November
2011 because it was “not
complete”. Second respondent seems to suggest that the
application is not complete because
the reports of the police,
municipality and liquor inspector have not been received. The second
respondent does not say when the
first respondent requested the
reports. Second respondent says it has no power to compel the police,
inspector and municipality
to provide their reports.
[14] Second respondent
says that applicant’s attorney is well aware of the fact that
there is a huge backlog. It was unrealistic
of applicant’s
attorney to expect a licence to be granted within three months,
“
13.5.1 ...
unless he attempts to jump the queue as he has done with almost 30
applications this year already and I emphasized that
the first
respondent cannot keep giving priority to his applications simply
because his clients have money to litigate, to the
prejudice of all
the other applicants abiding by the law and awaiting their turn.
13.5.2 The attorney should have known
that it would take at least six months if he followed the ordinary
route.”
[15] Second respondent
repeatedly refers to the lack of the reports without saying when (if
at all) they were requested, and the
backlog:
“
13.8.1 I
reiterate that the first respondent could not consider the
application which is not ripe for consideration as the reports
have
not been submitted.
13.8.2 Secondly, the first respondent
has to handle the backlog first and can not allow the applicant to
simply jump the queue and
be accorded preferential treatment just
because he took a risk which lead to his alleged losses well knowing
that he did not have
a licence and that there was no guarantee that
he would get one.”
[16] The second
respondent says the court cannot grant the applicant leave to trade:
“
15.2 I see
nothing that enables the court to put itself in place of the
specialised statutory body which has to consider all requirements
and
that would allow the court to circumvent the Act. If the court were
to grant the first prayer it would be allowing a person
to trade
without having considered any of the consequences and without
considering any possible prejudice to the public or other
entities in
its vicinity and would be allowing the applicant to trade without
imposing any conditions which the first respondent
might have imposed
if it had indeed decided to grant a licence.
15.3 That would give the applicant an
unfair advantage since he would for instance be allowed to trade
without any activation fees
and any restrictions which the first
respondent might have wanted to impose. An example would be that the
first respondent can
restrict trading hours because of the conditions
pertaining to that specific application in that specific area in
those prevailing
circumstances.
16.1 The allegations are not true. The
applicant is in fact asking the court for an interim interdict to
allow it to trade unconditionally
without a licence contrary to the
Act.”
[17] The applicant’s
response to the alleged defects in the application is as follows:
Licence fee
Formerly the fee was R1
500. The attorney overlooked the increase. The balance has been paid.
Approved plans
This is an existing
building where another well-known restaurant, the Cape Town Fish
Market formerly traded with a restaurant liquor
licence before it
moved to other premises. The first respondent knows that the plans
were approved, but approved plans will be
lodged.
(iii)
Discrepancy
in erf numbers
This was a mere
lapsus
calami
, a slip of the pen; nothing turns on it, it merely
indicates the nit-picking attitude of the respondents.
(iv)
Lack of
locus
standi
Applicant’s
deponent says in the replying affidavit that the applicant was a
shell company bought for the purpose of the liquor
licence. According
to the present records of the Companies Office, Ms Mourtzios is the
only director and shareholder of the applicant,
and was such at all
relevant times. An outdated annexure was
per incuriam
attached
to the liquor application.
[18] In response to the
backlog argument Ms Pretorius, on behalf of applicant, says that the
respondents must appoint more staff
or have more meetings. The Act
stipulates that the Board may not “meet” more times a
year. The Act does not state how
long a meeting can be, in days or
weeks.
THE REAL REASON FOR
THE DELAY
[19] From the answering
affidavit it appears that the true reason for the non-consideration
of the application is the huge backlog
of 773 applications. The
respondents apparently, after receiving this court application, went
through the restaurant application
with a fine toothcomb looking for
defects. Yet by virtue of the backlog, the position is simply that
this application was too far
back in the queue for consideration.
Respondents’ view is that applicant is trying to jump the
queue, as the applicant’s
attorney apparently has done
successfully 30 times during 2011. Respondents say there is nothing
special about this application
which requires preferential treatment.
[20] The facts relating
to the application are:
(i) On 5 August 2011
applicant applied for a restaurant registration certificate in
respect of the premises at Preller Square where
the Cape Town Fish
Market traded with a restaurant liquor licence before moving to other
premises.
(ii) Applicant has spent
R6.8 million to upgrade the premises.
(iii) It is a known fact
that restaurants without a liquor licence are hardly supported by the
public.
(iv) Applicant’s
restaurant will be known as Rhapsodys in terms of a franchise which
already operates 10 such restaurants
in South Africa and three in
Africa.
(v) It is anticipated
that liquor sales will represent 40% of turnover.
(vi) Applicant’s
rental per month is R57 000,00 per month, payable from 1 September
2011.
(vii) Applicant will
employ 50 employees, of which 28 have already been appointed.
(viii) Applicant has
started the training of 30 waiters and five barmen.
(ix) If the restaurant
cannot open by the end of November applicant will have to dismiss the
28 employees who have already been
appointed.
Even if the first
respondent considers the application immediately, it will not be
able to complete its consideration within two
months because the
necessary reports are not to hand.
Applicant will suffer
irreparable harm if it cannot trade in the festive season.
INTERIM RELIEF
[21] The second
respondent says the first respondent is comprised of members who are
appointed by reason of their expertise. The
first respondent has to
follow specific procedures and consider all the factors listed in the
Act and the regulations before making
an informed decision. They
serve the public interest. The second respondent continues:
“
9.4.20 It
could never have been the intention of the legislature to allow a
court on the one sided and incomplete version of an
applicant to
grant such applicant the right to circumvent the Act and to have his
application prioritised and considered ahead
of any other
applications with similar financial interests, except perhaps in the
most unusual and special circumstances. There
is no evidence that
there are any such special circumstances pertaining to this case and
I submit with respect that there is no
reason why the court would
allow this applicant special treatment to the detriment and prejudice
of all the other applicants. There
is no legal basis for requiring
this court without the benefit of the expertise of First Respondent’s
statutorily appointed
members and in the absence of the essential
reports required by the Act, to allow this applicant to practise
without a licence
in other words without having met the requirements
of the Act.”
[22]
Ms Murray, for respondents, submits that approaching a court before
an administrative body has been given the opportunity to
exhaust its
own existing mechanisms undermines the authority of the
administrative process with reference to
KOYABE AND
OTHERS v MINISTER FOR HOME AFFAIRS AND OTHERS (LAWYERS FOR HUMAN
RIGHTS A
S AMICUS CURIAE)
2010 (4) SA 327
(CC) par. [36].
[23] A
court should be careful not to usurp the function of a statutory
body, unless exceptional circumstances justify such intervention
-
RUYOBEZA AND ANOTHER v MINISTER OF HOME AFFAIRS AND
OTHERS
2003 (5) SA 51
(C) at 63 E – F;
BATO STAR
FISHING (PTY) LTD v MINISTER OF ENVIRONMENTAL AFFAIRS AND OTHERS
[2004] ZACC 15
;
2004 (4) SA 490
(CC) par. [46].
In the present
case, the respondents say the applicant must await its turn, which
could take them four years to have its application
heard and decided
by the first respondent. In such circumstances it would be in the
interest of justice to excuse the applicant
from exhausting internal
remedies, as contemplated by section 7(2)(c) of PAJA.
[24] In the
RUYOBEZA
-case
the applicants applied for refugee status and the granting of asylum.
The committee dealing with the application ignored the
first
applicant’s request for three months, which the court found an
unreasonably long time in the absence of an acceptable
explanation
(at 65 D – E). The court found that the delay would undoubtedly
cause further prejudice to the first applicant
(65 F – G). The
court found it just and equitable as contemplated in section 172(1)
of the Constitution to come to the assistance
of the applicant and
granted an order which was necessary to do justice between the
parties as envisaged in section 8(2) of PAJA
(65 F – G).
[25]
Ms Murray submits, with reference to
AIROADEXPRESS (PTY)
LTD v CHAIRMAN, LOCAL ROAD TRANSPORTATION BOARD
,
DURBAN, AND OTHERS
[1986] ZASCA 6
;
1986 (2) SA 663
(A) that the court will only grant relief
pendente
lite
where exceptional circumstances
are present and where, but for the exercise of such power, a litigant
would be remediless (at 676).
Ms Murray makes the point that where
interim relief has been granted in the past, such interim relief was
granted where the applicants
already had licences and then applied
for renewal. She refers to the three cases Kotze JA refers to in the
AIROADEXPRESS
-case (above) at 674 – 675,
namely
MORKEL AND OTHERS AND HAHNER JOHANNESBURG LICENSING
COURT
1914 TPD 395
;
GOLOMB v PRETORIA LIQUOR LICENSING
COURT
1917 TPD 1
and
DE FREITAS v CAPE LICENSING COURT
1922 CPD 350.
[26] In
GROENKLOOF
DRANKHANDELAARS (EDMS) BPK AND ANOTHER v L
IQUOR
LICENSING BOARD FOR AREA NO 3 AND ANOTHER
1965
(1) SA 866
(C) at 870 G – H Corbett J (as he then was) makes
the point that the power to extend the validity of a liquor licence
is
to be exercised by the Board. In the
GROENKLOOF
-case
the reason why the court was asked to grant interim relief was
because the renewal of a licence had been refused and the licence
was
due to expire within three weeks of the hearing by the court of an
appeal against the Board’s decision (866 H).
THE CONSIDERATIONS
OF THE BOARD
[27]
In considering an application the first respondent must consider the
public interest, the suitability of the building and area
and the
applicant (Lansdowne’s
South
African Liquor Law
5
th
Edition (1983) 119 – 121).
[28]
In the present case the Liquor Board previously approved a restaurant
licence on the premises.
Prima facie
the public interest requirements as to the area
and the premises have been satisfied. No facts have been put up by
the respondents
to disturb this
prima
facie
view.
[29] A
restaurant licence is ancillary to the main business of carrying on a
restaurant providing meals. The Board should be very
slow to refuse
to grant a restaurant liquor licence, because such licence does not
encourage people to drink more than they should
-
G
ALANAKIS
v LIQUOR
LICENSING BOARD OF
RHODESIA
1974 (2) SA 27
(RA) at 31
E – G). A restaurant liquor licence reinforces a responsible
drinking pattern, where liquor is used with food.
ADMINISTRATIVE LAW
RIGHTS
[30]
The applicant has a constitutional right to administrative action
that is lawful, reasonable and procedurally fair (section
33(1) of
the Constitution). The administration does not have a free hand to
behave as it wishes, in the words of Plasket J in
VUMAZONKE
v MEC FOR SOCIAL DEVELOPMENT, EASTERN CAPE, AND THREE SIMILAR CASES
2005 (6) SA 229
(EC) par. [11]. The administration
has to establish and maintain an efficient, equitable and ethical
public administration (
PRESIDENT OF THE REPUBLIC OF
SOUTH AFRICA AND OTHERS v SOUTH AFRICAN RUGBY FOOTBALL UNION AND
OTHERS
20
00 (1) SA 1
(CC) par. [133]).
Systemic problems, such as the current backlog of the first
respondent, must be addressed.
CONCLUSION
[31 In this case the
applicant cannot be forced to follow any internal remedy, because its
complaint is that the first respondent
is not taking the steps it
should, namely considering the application.
[32]
Although this is not an application for renewal, or an application
pending a review after the first respondent has considered
the
application, the applicant is fundamentally seeking to continue with
a pre-existing service, which was the basis upon which
the Appellate
Division decided to grant interim relief in
AIROADEXPRESS
,
supra
at
675 E – G). In that case in 1986 the Appellate Division held
that courts have an inherent jurisdiction to grant
pendente
lite
relief to avoid injustice and
hardship (676 C – D). Now section 8(1)(e) of PAJA, which came
into operation in 2000 specifically
makes provision for interim
relief.
[33] For almost a hundred
years interim relief has been granted in regard to the renewal of
liquor licences (
AIROADEXPRESS
, above, at 674 B –
C), the earliest case referred to being that of
MORKEL
,
supra
,
1914 TPD 395).
Ms Murray argues that interim relief is
not granted where the application has not been considered by the
Board at all. Also in
BHARSHILA INVESTMENTS CC v GAUTENG
PROVINCIAL LIQUOR BOARD
(North Gauteng Case 32820/11 of 11
June 2011) Tuchten J granted leave to the applicant to trade pending
the review of the Board’s
decision.
[34] In the
AIROADEXPRESS
-case, above, Kotze JA makes the point
that the distinction between a new grant and a renewal is unimportant
where the application
is fundamentally the continuation of a
pre-existing service (675 E – G).
[35] In the present case
a license was in operation over the premises. There is no allegation
of a negative influence on the area
or detriment to the public
interest. The only new factor is the applicant. No reason has been
advanced why the applicant is not
a proper entity to be granted the
licence. One is here dealing with a franchise which is already
operating countrywide in ten outlets.
Fundamentally one is here
dealing with a pre-existing licence.
[36] This is an
exceptional case where interim relief should be granted:
(i)
The applicant has the right to carry on the trade, occupation on
profession of its choice. That was law even before the Constitution
section 22. See
ESTATE AGENTS BOARD v LEK
1979
(3) SA 1048
(A) at 1064 C – D:
“
It
is, of course, clear that ordinarily a person is free to carry on the
trade, calling, or profession of his choice.”
The premises were
previously licensed for the operation of a restaurant liquor
licence.
The applicant applies
for exactly the same type of licence which previously operated in
respect of the premises, because that
former restaurant licence has
been removed to other premises.
Previously the well
known Cape Town Fish Market operated a restaurant with a liquor
licence on the premises for five or six years.
The previous restaurant
attracted no criticism from the respondents or any other person.
There is no evidence
that there were any complaints that the trading of liquor from these
premises was not in the public interest
or had a negative impact on
the area or the public.
Because of the previous
licensing of the premises it is unlikely that applicant’s
application will fail.
The applicant has spent
R6.8 million refurbishing and upgrading the premises.
The applicant will
employ 50 staff members and at this stage already employs 28.
The applicant has shown
an ethos of public responsibility which is one of the objects of the
Act (section 2(1)(b)(iii)) in appointing
and training a considerable
number of staff, even before commencing business.
The applicant will
operate as a franchise which already operates ten restaurants
countrywide.
The respondents have
indicated that applicant must await its turn in the queue of 773
plus applications which have not been considered.
The applicant has a
lease contract of R68 000,00 per month from 1 September 2011.
The applicant applied in
good time, on 5 August 2011, taking into account the time periods
prescribed for the asking and dealing
of the reports of the police,
the liquor inspector and the municipality.
The first respondent has
apparently consented to interim trading in 30 cases brought to court
by the applicant’s attorney
this year.
The respondents went
through the liquor application attached to the founding affidavit
with a fine toothcomb and pointed out all
the defects it saw, the
application has been fully considered and canvassed and all the
facts are before the court.
Conditions normally
attached to restaurant liquor licences are standard.
MANDAMUS
[37] In the notice of
motion the applicant seeks an order that the respondents be directed
to consider applicant’s application
within 60 days of the court
order. In argument Ms Pretorius abandoned that relief, stating that
applicants need would be catered
for sufficiently by granting interim
relief.
COSTS
[38] This application was
set down as one of urgency. The respondents were given six days
notice, but the notice of motion fixed
no time for the filing of
affidavits, as is usually done in semi-urgent applications. When the
respondents arrived at court on
1 December 2011, the matter had to be
postponed. Ms Pretorius, for applicant, did not persist with an
argument as to the costs
of the hearing on 1 December 2011 and
conceded that the applicant could be ordered to pay the wasted costs
of 1 December 2011.
ORDER
[39] 1. Pending the
consideration of applicant’s application for a restaurant
registration certificate by the first respondent,
the applicant is
authorised to trade as if the registration for which the applicant
applied, has been approved until the first
respondent has considered
the application and decided upon it, and if it is approved until the
registration has been issued.
2. The respondents are
ordered to pay the costs of the application, except the wasted costs
of the hearing on 1 December 2011, which
are to be borne by the
applicant.
__________
KRUGER
On
behalf of applicant: Adv. L.A. Pretorius
Instructed
by:
Honey
Attorneys
BLOEMFONTEIN
On behalf of first
respondent: Adv. H. Murray
Instructed by:
State Attorney
BLOEMFONTEIN
/sp