Wina Njalo(RF) Proprietary Limited v Minister of Trade, Industry and Competition and Others (2025/039592) [2025] ZAGPPHC 517 (21 May 2025)

IN THE HIGH COURT OF SOUTH AFRICA
(GAUTENG DIVISION, PRETORIA)
DELETE WHICHEVER IS NOT APPLICABLE
(l)REPORTABLE : NO.
(2) OF INTEREST TO OTHER JUDGES: NO.
(3) REVISED.
21 May 202S ~
SIGNATURE
Case Number: 2025-039592
In the matter between:
WINA NJALO (RF) PROPRIETARY LIMITED
and
MINISTER OF TRADE, INDUSTRY AND COMPETITION
NATIONAL LOTTERIES COMMISSION
ITHUBA HOLDINGS (RF) PTY LTD
THE MINISTER OF FINANCE
ITHUBA LOTTERY (RF) PTY LTD
SIZEKHAYA HOLDINGS (PTY) LTD Applicant
First Respondent
Second Respondent
Third Respondent
Fourth Respondent
Fifth Respondent
Sixth Respondent
2
This judgment was prepared and authored by the Judge whose name is reflected and
is handed down electronically by circulation to the Parties/their legal representatives
by email and by uploading it to the electronic file of this matter on CaseLines . The
date for handing down is deemed to be 21 May 2025.
JUDGMENT
POTTERILL J
Introduction
[1] The applicant, Wina Njalo (RF) Proprietary [Wina Njalo] is on an urgent basis
seeking relief against the first respondent, The Minister of Trade, Industry and
Competition [the Minister] to declare unconstitutional , unlawful and invalid, and to
review and set aside the failure of the Minister to take a decision to announce the
successful applicant of the National Lottery. Furthermore, to declare unconstitutional ,
unlawful and invalid, and review and set aside the Minister's decisions to extend the
bid validity period for a further 12 months and to issue a Request for Proposal [RFP]
to operate the National Lottery on a temporary licence for 12 months. The Minister is
also to be directed to announce the successful applicant by 9 May 2025 and negotiate
and conclude a License Agreement with the successful Applicant and issue the Fourth
National Lottery Licence to the successful Applicant by no later than 31 May 2025.
[2] The Minister opposed all the relief sought. The second respondent, the National
Lotteries Commission [the NLC) opposed the urgency of the matter and that the
decision to issue the temporary licence RFP be reviewed and set aside. The fifth
respondent, lthuba Lottery (RF) Pty Ltd [lthuba Lottery] similarly opposed the urgency
of the application and the review of the decision to issue the temporary licence RFP.
The sixth respondent, Sizekhaya Holdings (Pty)Ltd [Sizekhaya] abided the Court's
decision and counsel for Sizehhaya was in court on a watching brief. The third
3
respondent, lthuba Holdings (RF) Pty Ltd and the fourth respondent, the Minister of
Finance did not partake in the proceedings.
Common cause facts
[3J It is common cause that the current incumbent of the licence for the National
Lottery is lthuba Holdings with its licence to expire on 31 May 2025. A new licence [the
Fourth Licence] must thus be issued and to facilitate this process the previous Minister
in two newspapers in early August in terms of s13(2)(a) of the Lotteries Act 57 of 1997
[the Act] invited interested parties to apply in writing for a copy of the RFP and invitation
to a briefing session. The RFP was made available for purchase on 31 August 2023.
In terms of Chapter 3 of the RFP for this Fourth Licence the following timelines were
set out:
The bid evaluation, adjudication and independent auditing had to be concluded
by 31 August 2024;
The Minster was to announce the successful bidder by 2 September 2024;
The Minister and the successful bidder were to conclude and sign a licence
agreement by 13 December 2024.
The commencement of transition and handover period from lthuba Holdings to
the new operator om 1 June 2025.
[4] On 3 February 2024 the NLC received eight applications in response to the
RFP. On 18 September 2024 the Evaluation Committee's report was delivered to the
NLC. The NLC Board concluded its adjudication and reported to the Minister only on
11 October 2024. The Minister on the very same day appointed a Quality Assessment
Committee [QAC].
[5] On 22 and 25 November 2024 the Minister consulted with the NLC Board in
respect of the Fourth License process. On 20 December 2024 the Minister consulted
with the Board of the NLC and advised that he was not, at that stage, in a position to
make a final decision regarding the successful applicant. He further requested the
Board's advice on the most appropriate means to ensure the continued operation of
4
the National Lottery in the interim, as well as the development of a programme to bring
the licensing process to finality.
[6] On 21 December 2024 the Minister issued a media statement that was
published in the Virtual Data Room [VDR] on 26 December 2024. In this statement the
Minister stated he was aware that the country and the applicants for the licence were
anxiously awaiting his decision, but "he was mindful of the complexity and gravity of
the issues that must be considered." And:
"Unfortunately , I am not in a position to make a final decision at this stage. Any
such decision at this time would in all good conscience mean that I have not
applied my mind with due consideration of all the relevant factors. I have
identified matters that require further evaluation. It would be inappropriate to
disclose these issues now and their disclosure could very well prejudice the
proper adjudication of the awarding of the licence. A protection of the integrity
of the process is of paramount importance . Therefore, I have decided to
postpone my decision pending the consideration of these matters. I am
awaiting advice on the best way to ensure the continuation of the national lottery
in the interim and the development of a programme to finalise this process,
which I have directed must be done after consultation with the National
Treasury. Throughout this process I have been, and will continue to be, in
communication and consultation with the Board of the National Lotteries
Commission."
[7] On 10 February 2025, the NLC addressed a letter to the Minister, recording that
the Minister had "directed the Board to commence the process to furnish him with
advice on the possibility of awarding a temporary license." The NLC conveyed that its
advisors had concluded that the period remaining between January 2025 and June
2025 was insufficient to allow for the proper selection of a successful applicant, the
negotiation and finalisation of a license agreement, and the necessary transitional
arrangements for the new operator to assume responsibi lity for the National Lottery by
1 June 2025. The NLC accordingly advised the Minister of various options available
to him, identifying the issuance of a temporary license as the most viable course of
action under the circumstances. The NLC Board further characterised the issuance of
a temporary license as inevitable should a Fourth License operator not be appointed
5
imminently. The NLC also sought clarity from the Minister regarding the anticipated
timing of his decision on the award of the Fourth Lottery License and recommended
an extension of the bid validity period for the Fourth License by one year, until 31 May
2026, to allow for the proper completion of the licensing process.
[8) On 19 February 2025 the Minister informed the parties that he intended to
extend the bid validity period and sought Wina Njalo's consent to the extension. On
24 February 2025 Wina Njalo indicated to the Minister that in order for it to make an
informed decision it required clarity on the Minister's reasons for the proposed
extension. The Minister responded on 4 March 2024 with that he had several issues
of concern and that it would be "inappropriate to disclose these issues now as
disclosure would prejudice the proper adjudication of the bids." On the same day, 4
March 2024, the temporary licence RFP was published.
[9] On 5 March 2025 Wina Njalo again wrote to the Minister recording his failure to
provide reasons and averred that the temporary licence RFP's terms afforded only the
incumbent, lthuba Holdings, the opportunity to be a successful bidder. The Minister
responded to this letter on 11 March 2025 setting out that the reasons for his decision
were those set out in the earlier letter of 4 March 2025 and constituted his full reasons
for seeking an extension of 12 months. The Minister stated that he would consider
Wina Njalo's concerns before any decision is made regarding the temporary licence
RFP.
[10] On 27 March 2025 the Minister published a letter on the VDR stating his
intention to invoke clause 8.2.7 of the RFP and announce a successful applicant by "a
target date" of 25 May 2025, subject to successful negotiations on the terms of the
agreement.
[11] On 30 March 2025 Wina Njalo wrote to the Minister proposing a consent order
to formalise the Minister's new target date so as to avoid the urgent hearing. On 1 April
2025 the Minister responded to Wina Njalo stating that he could not provide an
unequivocal undertaking. In the answering affidavit he submitted: "In my letter of 3
March 2025, I indicated that my intention was to finalise the awarding of the Fourth
National Lottery Licence and the conclusion of a licence agreement by 31 May 2025.
It is not possible to give an unequivocal undertaking in this regard because I cannot
6
guarantee that the negotiations about the licence agreement will result in a satisfactory
agreement. "
[12] On 24 March 2025 Wina Njalo launched the urgent application.
Urgency
[13] Wina Njalo avers that the urgency lies therein that the Third Licence expires on
31 May 2025 with the Minster failing to award the Fourth Licence. With the Act barring
an extension of the Third Licence, without Court intervention, there will be no operator
for the National Lottery after 31 May 2025. Should the National Lottery cease
operations there is a real and substantial risk that beneficiaries of vital funding will be
deprived of necessary assistance through the National Lotteries Distribution Trust
Fund [NLDTF] funds for good causes. The RFP stipulates that a five-month rollout
period is necessary for a new operator to become fully operational. As such, it is
imperative that a successful applicant is appointed to prevent the depletion of the
NLDTF's reserve funds. An interruption in the National Lotteries operations exacerbate
the threats of illegal gambling and undermines the National Lottery's credibility. Re­
starting the Lottery would mean fewer players and damaged trust. The mounting public
prejudice demanded urgency.
[14] If the Court did not intervene an unconstitutional temporary process would
cause harm. The temporary license would have to be issued before 31 May 2025 and
there will be no substantial redress in the ordinary cause. Similarly the award of the
Fourth Licence, if not urgently addressed, will obtain no meaningful redress in due
course.
[15] The application was launched on 24 March 2025 the first business day after the
Minister failed to provide the undertakings sought in Wina Njalo's letter of 13 March
2025. As no response was received from the Minister to this letter by 20 March 2025
this application was launched within 4 days. No legal action could be taken on 21
December 2024 when the media announcement was made because Wina Njalo's
complaint relates to unreasonable and ongoing delay on the part of the Minister. The
7
correspondence to the Minister to avoid rushing to a court is "prudent and
salutatory ... "1
[16) The bidders were only informed of the Bid Extension Decision on 19 February
2025 and the temporary licence RFP decision on 3 March 2025. These decisions could
only be challenged thereafter and therefore these decisions of the Minister are also
the subject of this legal challenge. Despite the launch of the application Wina Njalo
invited the Minister to agree to a consent order which could accommodate the
possibility that the 31 May 2025 deadline could not be met, but the Minister refused to
consent. In the answering affidavit the Minister also did not give an unqualified
undertaking. The matter is self-evident ly urgent.
[17] Both the Minister, the NLC and lthuba argue that the matter is not urgent relying
on the same foundation, although not called by name: self-created urgency. It is
common cause that the Minister was required to make a decision regarding the Fourth
Lottery License by 2 September 2024. The Minister contended that Wina Njalo was
aware from 21 December 2024, that the decision would not be made and argued that
there was an unreasonably long delay between December 2024 and the launching of
the application in March 2025. The Minister placed considerable emphasis on this
delay in bringing the application, asserting that Wina Njalo had failed to provide a
reasonable explanation for the delay.
[18) Both the Minister and lthuba further argue that the Minister's decision to extend
the bid validity period was disclosed on 19 February 2025, followed by the issuance
of the temporary license RFP on 3 March 2025. Despite being aware of these
developments, Wina Njalo delayed the filing of the application until late March 2025.
Wina Njalo should have approached the Court at the earliest opportunity in December
2024. The NLC added that Wina Njalo could soon after 4 March 2025, pursuant to
being informed of the temporary licence issuance and the extension of the current
RFP, have at the very least have approach ed the Court.
1 Centre/or Child Law and Others vSouthA/rican Council/o r Educators and Others 2024 (4) SA473 (SCA) par
(11)
8
[19) The Minister further submitted that he did not deviate from his responses to the
numerous correspondences sent by Wina Njalo over the period December 2024 to
March 2025 and the correspondence by Wina Njalo was a mere tactic to obtain time
to compile this substantial application. It was further argued that the cause of action
for Wina Njalo to correspond with the Minister undermines the assertion that the
application is urgent.
[20] The Minister further asserted that his undertaking to announce his decision
regarding the successful bidder before 28 May 2025 mitigated Wina Njalo's claim of
urgency and lack of substantial redress in due course. According to the Minister, in
light of his undertaking , the urgency based on the alleged inaction has diminished.
Wina Njalo could obtain substantial redress, namely the announcement of the
successful bidder, through the Minister's undertaking, thereby rendering the urgent
intervention of the Court unnecessary. The remaining issues concerning the
lawfulness of the delay, the temporary license RFP, and the bid validity extension may
be addressed in the ordinary course of proceedings .
[21] lthuba further argued that the review of the temporary license RFP is not
urgent, as the issuance of the temporary license would ensure that National Lottery
operations continued uninterrupted beyond 1 June 2025. It was contended that the
matter did not become urgent merely because the Minister may have made an
unlawful decision and that Wina Njalo had failed to demonstrate why substantial relief
would not be available in the ordinary course.
[22] On behalf of the NLC it was further contended that Wina Njalo had failed to
demonstrate why it cannot be afforded substantial redress in due course in light of the
Minister's intention to issue a temporary license and his undertaking to endeavour to
announce the successful applicant by no later than 28 May 2025. There is no harm
as the national Lottery will stay operational.
Decision on urgency
[23) The first question to be answered is whether the urgency is self-created. Self­
created urgency is fatal to an application. Self-created urgency is the urgency which
9
stems from a deliberate inaction until the hour of reckoning. Courts have consistent ly
refused urgent applications in cases were the urgency relied upon was clearly self­
created with the appropriate order of striking the matter from the roll. 2 Consistency in
striking self-created urgency matters from the roll is important as it informs the public
and legal practitioners that the rules of Court and Practice Directives can only be
ignored at a litigant's peril.
[24) The test for urgency was in East Rock Trading 7 (Pty) Ltd and Another v Eagle
Valley Granite and Others3 reiterated as follows: "The import thereof is that the
procedure set out in rule 6(12) is not there for taking. An applicant has to set forth
explicitly the circumstances which he avers render the matter urgent. More
importantly , the Applicant must state the reasons why he claims that he cannot be
afforded substantial redress at a hearing in due course."
[25] I cannot find that the urgency is self-created. If the application was brought after
the media release in December 2024 it could have been argued that the application
was premature as the licence still had 5 months before expiry and the Minister still had
sufficient time to make the award and have it successfully implemented.
[26) The delay between the Christmas and New Year period in December till March
is explained . Wina Njalo responded to the request for the extension of the bid 5 days
after the Minister signalled his intention by requesting reasons for this. The Minister
only responded on 4 March 2025 and on the same day published the temporary
licence RFP. In the letter of 4 March the Minster stated that he intended to announce
the Fourth Licence award on 31 March 2025. On 5 March 2025 Wina Njalo again wrote
to the Minister informing inter a/ia that the temporary licence RFP terms would only
benefit the incumbent. Due to the Minister's statement that he intended to announce
the Fourth Licence on 31 May 2025 Wina Njalo sought such undertaking in its letter to
the Minister on 13 May 2025. When no such undertaking was given the application
was launched. On this timeline Wina Njalo acted reasonably and attempted to avoid
litigation launching this application as soon as it was clear that the Minister was not
prepared to give an unequivocal undertaking .
2 Commissioner , South African Revenue Services v Hawker Air Services (Pty) Ltd; Commissioner, South African
Revenue Services v Hawker Aviation Partnership 2006 (4) SA 292 (SCA) par [9]
3 (l l/33767) (2011) ZAGPJHC 196 (23 September 2011)
10
[27] There will be no substantial redress in due course. The temporary licence RFP
is to be announced on 31 May 2025, rendering any recourse in due course ineffective
as to the specific remedy sought: declaring the RFP invalid as it will be announced by
then. The bid extension just confirms that the Minster has catered for that the award
not being timeously announced and paving the way for the temporary licence RFP.
[28] As for the Fourth Licence the Minister in these papers still refrained from giving
an unconditional undertaking that the award will be announced by 28 May 2025 and
with the licence to expire on 31 May 2025 the relief sought is manifestly urgent. The
announcement of the award should have been done by 2 September 2024. The
decision to extend the bidding process and the temporary licence RFP are indicative
thereof that the decision is not imminent. Although these steps may be seen as bona
fide contingency plans it does not negate the fact that the Minister has not announced
the Fourth Licence as he was constitutionally required to do. The absence of a
designated licensee beyond the expiry date creates a risk of operational disruption
with potentially severe consequences for beneficiaries and the broader public. In these
circumstances , the matter is urgent.
The non-decision in awarding the Fourth Licence
Facts and argument on behalf of Wina Njalo
[29] It is common cause that the Minister has not taken a decision as required by
the Fourth Licence RFP within the time-frame set to take such decision. Not taking a
decision is in terms of the provisions of the Promotion of Administrative Justice Act 3
of 2000 [PAJA] susceptible to judicial review. In lntertrade Two (Pty) Ltd v MEG for
Roads and Public Works Eastern Cape and Another4 the Court found that: " ... no final
decision has been taken in respect of the tenders, despite the effluxion of a more than
unreasonable time for a decision to be taken. This means that there can be no dispute
that lntertrade is entitled to relief: s 6(2)(g), together with section 6(3)(a) of the PAJA,
provide that the failure to take a decision within a reasonable time was a ground of
4 2007 (6) SA 442 (Ck) at par [34)
11
review and hence an infringement of the fundamental right to just administrative
action."
[30) Once there is reliance on s6(2)(g) of PAJA [failure to take a decision] a party
can in tum in terms of s6(3) also review the failure to take a decision on the ground
that there had been unreasonable delay in taking the decision.
[31) The Minister's failure to issue the Fourth License is unreasonable because the
record reflects no reasons for the Minister's inaction. No reasons are set out in the
answering affidavit for the delay to take the decision. It must be accepted that the delay
is manifestly unreasonable as the Minister had not set out justifiable reasons for the
delay. The Supreme Court of Appeal has found: " ... what is expected of an
administration that has justifiable reasons for what appears to be unacceptable delay
in carrying out its functions are full and frank explanations that will enable a court to
assess their adequacy when determining whether the administration has acted
reasonably". 5
[32] Furthermore, a non-award is also executive in nature, therefore it would be
subject to a legality review in light of the obligation under section 237 of the
Constitution that requires all constitutional obligations to be performed without
unreasonable delay. The RFP set a reasonable timetable for a smooth transition for
the incumbent lottery operator to the new entity that would be taking over the operation
of the lottery on 1 June 2025. The Minister and the NLC were obliged to give effect to
the Lotteries Act and complete the procurement process to award a new license as
required and recorded in section 13 of the Act. There is no timetable in place by the
Minister to meet this deadline and the Minister has failed unequivocally to commit to
making the award.
[33] The unreasonableness of the delay is borne out by the facts disclosed in the
Minister's answering affidavit. The Minister stated that the NLC made its
recommendat ion on 11 October 2024, and on the same day he appointed the QAC to
review the NLC's process. However, the Minister failed to indicate when the QAC
concluded its work, whether any specific timeframes were set for the completion of its
5 MEC for the Department of Welfare v Kate 2006 ( 4) SA 478 (SCA) par [l 0]
12
mandate, and what the scope of its review entailed. Critically, no explanation was
offered as to how the OAC's appointment could reasonably justify a delay of nearly a
month in the awarding of the Fourth National Lottery License. In the absence of this
information , the delay remains unexplained and on the face of it unjustifiable.
[34] The Minister was invited to utilise an appropriate confidentiality regime if the
evidence was sensitive, a system that has been recognized by our courts in
appropriate circumstances , but has failed to do so.
[35) The decision unsupported by reasons was also irrational because if a decision
affects rights there must be rational justification.6 The Constitution requires that every
action taken in the exercise of public power must be underpinned by plausible reasons
that justify the action taken. If there are no reasons the decision is arbitrary and
reviewable.
[36] The Minister's failure to disclose the unspecified concerns or matters requiring
further evaluation amounts to no reasons at all. Support for this submission was found
in the matter of Judicial Service Commission v Cape Bar Council (Centre for
Constitutional Rights as amicus curiae)7:
" ... it is rather cynical to say to an affected individual: you have a constitutional
right to a rational decision that you are not entitled to know the reasons for
that decision. How will the individual ever be able to rebut the defence of the
decision-maker: 'Trust me, I have good reasons but I am not prepared to
provide them?' Exemption from giving reasons will therefore almost invariably
result in immunity from an irrationality challenge. "
[37] Despite many requests for reasons the Minister, had failed to provide same. In
the absence of reasons there is no justifiable reason why the Fourth Licence should
not be awarded. The non-award decision is reviewable in terms of section 6(2)(a)(iii),
6(2)(e)(ii) and (v), 6(2)(e)(vi ), 6(2)(f)(ii), 6(2)(h), 6(2)(i) and 6(2)(f)(i) and 6(2)(c) and
6(2)(f)(ii) of PAJA and/or the principle of legality. A decision is also reviewable on a
6 MECfor Education: Kwazulu-Natal and Others v Pi/lay 2007 (2) SA 106 (CC) paras [101) and [106]
7 (818/11) (2012) ZASCA 115 (14 September 2012) par [ 44)
13
self-standing basis that if it constitutes a failure to take a decision in terms of section
2(g) of PAJA.
[38] The court should direct the Minister to make a decision towards the Fourth
License RFP before the end of May 2025. The Court can grant the relief, as it is
catered for in Section 8(2) of PAJA.
[39] The Minister's failure furthermore evidences a clear breach of his obligations
under section 195 of the Constitution, which in terms of section 35 of the Act, must be
strictly complied with. The obligations in terms of section 195 include inter alia
"efficient, economic and effective use of resources ,8 fair provision of services9, the
need to respond to people's needs 1°, the public administration must be accountab le 11,
transparency must be fostered by providing the public with timely accessible and
accurate information ."12
[40) It is accepted that the Minister is entitled, in terms of the RFP, to amend the
timetable , but only after consultation with the NLC. It is, however, contended that such
consultation has not been properly undertaken. In the absence of disclosure of the
Minister's actual reasons for the delay, the NLC could not have been placed in a
position to engage meaningfully in the consultation process. Effective consultation
requires that sufficient information be furnished to the consulted party to enable it to
provide informed and constructive input. Without such disclosure, any purported
consultation is rendered inadequate and fails to meet the standard.
[41] The court should direct the Minister to make a decision to award the Fourth
License RFP before the end of May 2025. The Court can grant the relief as catered
for in Section 8(2) of PAJA. The Minister's undertaking failed to produce the effect that
he asserted. The Minister continues to act unlawfully by not making a decision. Should
the delay be considered unreasonable , Wina Njalo is entitled to the declaratory relief
sought in terms of section 172(1 )(a) of the Constituti on, and the Court is obligated to
8 Section 195(l)(b)
9 Section 195(l)(d)
10 Section 195(1Xe)
11 Section 195(1Xt)
12 Section 195(1)(g)
14
declare that the Minister's continued failure to award the Fourth Lottery License is both
unlawful and unconstitutional. The Minister's «undertaking to try t_o announce a
successful applicant by the end of the month" is a ground for the Court to compel the
Minister to make such an announcement. It is further contended that the consequential
relief, requiring the Minister to make a decision, is not rendered moot. Until such a
decision is made, and in light of the Minister's ongoing failure to act, the relief sought
remains warranted. The Minister seeks to retain flexibility, allowing the possibility of
retracting his undertaking, thereby highlighting why the undertaking is inadequate and
does not obviate the need for the relief sought by Wina Njalo. The Minister's "target
date" serves to confirm his awareness that the continued delay is unjustifiable .
Notably, he has failed to justify the delay on any factual grounds.
Facts and argument on behalf of the Minister
[ 42] The Minister submitted that the timeline was derailed by the QAC's failure to
submit its report to him within the prescribed period, with the report only being
delivered on 11 October 2024. This delay curtailed the time available to the Minister
to consult the Board and to make a considered decision. This delay necessitated by
thorough and responsible consideration did not equate to a failure to decide. The
Minister's responsible approach should not be misconstrued as a lawful failure to act.
[43] Paragraph 8.2.4 of the RFP empowered the Minister to appoint an independent
advisor, which he exercised by appointing the QAC on 11 October 2024. This
appointment demonstrated that the Minister did not merely rubber-stamp the Board's
recommendat ion but was intent on ensuring that every aspect of the process was
thoroughly scrutinised prior to making a final decision. In terms of the RFP's timetable,
the Minister was afforded only two calendar days to consider the Board's
recommendations -a period that was manifestly insufficient. Consequently, the delay
in the decision-making process arose from circumstances beyond the Minister's
control. Nevertheless, the Minister remains committed to ensuring that the tender
process is not rendered futile and that the National Lottery continues to function
effectively .
15
[441 As a contingency, the Minister decided to issue a Temporary License RFP and
extend the validity of the bidding process beyond 31 May 2025.
[45) It was submitted that in light of the Minister's undertaking to announce his
decision by 28 May 2025, the relief sought has become moot. Accordingly, it would
serve no purpose to determine whether the delay in making the decision constitutes a
reviewable non-decision, as such a determination would yield no practical
consequence.
[46) The Minister cannot consent to the granting of an order unless it is expressly
qualified by the proviso that he cannot be compelled to make an announcement where
circumstances beyond his control render such action impossible. The Minister's
undertaking is, therefore, not unequivocal. The Minister maintained that the decision­
making process in question is complex and sensitive, involving the appointment of the
QAC, consultations with the NLC Board, and ongoing evaluative processes. He
contended that a delay occasioned by the need for thorough and responsible
consideration does not constitute a failure or refusal to decide. The matter of Helen
Suzman Foundation v The Judicial Service Commission 2018 (4) SA 1 (CC) did not
lay down a general principle that confidential information must always be disclosed.
[47] The Minister maintained that judicial intervention compelling him to take a
decision is no longer warranted, given his commitment to act within a reasonable
timeframe. It is further submitted that, for a failure to act to constitute reviewable
administrative action under PAJA it must fall within the statutory definition of a
"decision ", which includes a failure to take a decision when there is a legal duty to do
so. However, the Minister contends that his decision-making process remains ongoing
and that no final decision has yet been reached. It is only once a part of the decision
becomes final that it can properly be characterised as administrative action.
Accordingly, any challenge premised on an alleged non-decision is premature.
[48] The Minister's press release dated 21 December 2024 provided reasons,
specifically, that the Minister is not yet in a position to give full reasons . On behalf of
the Minister, it was concluded that, given his commitment to make a decision, albeit
not unequivocal, this undertaking should be regarded as adequate. Counsel
16
contended that the decision is not arbitrary, as the Minister gave reasons, although
not detailed, it is sufficient.
Facts and Argument on behalf of the NLC.
[49] The NLC limited its submissions pertaining to the Minister's failure to make a
decision regarding the award of the Fourth Lottery License to whether there was
consultation, as required, between the Minister and the NLC.
[50] The NLC's primary contention was that both the Minister and the NLC had fully
complied with the consultation requirements set forth under the Lotteries Act prior to
the Minister taking any decisions. Counsel for the NLC meticulously outlined the
processes followed and the consultations held between the NLC and the Minister.
These processes confirmed that proper consultation had taken place and that the
Minister should be in a position to make a decision.
[51] It was argued on behalf of the NLC that the Minister's failure to make a decision
was remedied by his consultations with the NLC, as well as his ultimate decision to
issue a temporary license RFP and extend the bidding period by one year, thereby
ensuring that there would be no disruption in National Lottery operations following the
expiration of the current license. Furthermore, it was contended on behalf of the NLC
that section 172 of the Constitution may permit unlawful decisions where they are
made in the public interest.
Decision on the non-award of the Fourth Licence
[52] I understand that the award of the Fourth Licence is complex and of national
importance . I can understand that the NLC's Board report only reaching the Minister
on 11 October 2024 affected the timeline within which the Minister had to make a
decision. I also appreciate the Minister has as contingency devised the extension of
the bid validity and the temporary licence RFP to avoid disruption to the operation of
the National Lottery. But, what I do not know and therefore cannot understand is why
the decision has not been taken and why an undertaking can be given, but not
17
unconditionally. This in tum impacts on the reasonableness and/or rationality of the
decisions to extend the bid validity and the temporary RFP.
[53) In terms of s1 of PAJA refusing to issue a licence, or to make an award, or
refusing to take a decision all constitute administrative action. In terms of the
empowering Act and the Constitution the Minister has the duty to award the Fourth
Lottery, if he does not do so within the time-frames of the RFP, he is not fulfilling his
constitutional duty and at the very least must provide reasons for this delay. He simply
has not. In the media statement no reasons are provided except that the Minister had
uconcerns" and the reason proffered for the refusal to provide reasons for these
concerns is confidentially. He has not provided reasons, under these circumstance s
required to do so, in the record filed.13 He has not done so in the answering affidavit
and therefore in terms of Ptascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd
1984 (3) SA 623 (A) the Court has to accept Wina Njalo's facts as set out.
[54] The Minister did not at all address that if confidentiality was crucial why a
confidentiality regime could not be adopted. In this Court the practice is often
successfully applied. This procedure has also been endorsed by the Supreme Court
of Appeal in Caxton and CTP Publishers and Printers Limited v Novus Holdings
Limited [2022) 2 All SA 299 (SCA) as follows:
"[81] Permitting the production of confidential documents subject to
appropriate limits is now firmly established in our law. As it was expressed by
Mthiyane JA more than a decade ago in Tetra Mobile Radio (Pty) Ltd v
Member of the Executive Council of the Department of Works and Others 14:
'[l]f there was any apprehension on the part of the respondent regarding
any specific document, that concern could be met by making an order
similar to the one granted by Schwartzman J in ABBM Printing &
Publishing (Pty) Ltd v Transnet Ltd [1998 (2) SA 109 (W) at 122I-J to
123A-B; 1997 (10) BCLR 1429; [1997] 4 All SA 94], where the parts of
the documents in respect of which disclosure might result in breach of
13 Helen Suzman Foundation vJudicial Service Commission 2018 (4) SA 1 (CC) par [63)
14 [2007] ZASCA 128; [2007] SCA 128 (RSA); 2008 (1) SA 438 (SCA)
18
confidence were to be identified and marked as confidential and the
applicanf s attorney was prohibited from disclosing such parts to any
other party, including the applicant, save for the purpose of consulting
with counsel or an independent expert. In that way a fair balance could
be achieved between the appellant's right of access to documentation
necessary for prosecuting its appeal, on the one hand, and the third
respondent's right to confidentiality, on the other.'
[82] The decision of this court in Bridon International Gmbh v International
Trade Administration Commission and Others15 endorsed the adoption of the
confidentiality regime crafted by the court a quo and observed that: 'As to the
solution preferred by the court a quo, Bridon's main objection is that it is
difficult to apply in practice and that it provides no absolute guarantee against
leakage. Though these objections are not without substance , the types of
restrictions imposed in the court a quo's order are not novel. Despite Bridon's
pessimistic predictions similar orders had been granted before, for example,
in Moulded Components and Rotomoulding South Africa (Pty) Ltd v
Coucourakis and Another 1979 (2) SA 457 (W) and in Crown Cork & Seal Co
Inc and Another v Rheem South Africa (Pty) Ltd and Others 1980 (3) SA
1093 (W). More recently, this type of order has also been used as a
mechanism in the application of s 45(1) of the Competition Act 89 of 1998,
which is very similar in wording to s 35(3), in that it requires the Competition
Tribunal to "make any appropriate order concerning access to that confidential
information" (see Competition Commission v Unilever pie and Others 2004 (3)
SA 23 (CAC) at 30F-I)."
[55] The Minister has not set out justifiable reasons for the delay in awarding the
licence and it is expected of the Minister to set out "full and frank explanations that will
enable a court to assess their adequacy when detennining whether an administration
has acted reasonably ."16.
15 [2012] ZASCA 82; (2012) 4 All SA 121 (SCA); 2013 (3) SA 197 (SCA) para 35
16 MEC, Department of Welfare, Eastern Cape v Kate 2006 (4) SA 478 (SCA) par (10)
19
[56] Furthermore the Minister is under a constitutional duty to exercise his powers
in such a way that is not irrational or arbitrary. The absence of reasons offends the
Constitution 's proscripts of arbitrary action and established arbitrariness. The Minister
is also bound by the values set out in s195 of the Constitution of transparency and
accountability. In not providing reasons for the delay there is no transparency. The
Minister is also in breach of s237 of the Constitution in that he has not diligently and
without delay performed his constitutional obligations.
[57] It follows that the delay in the non-award decision and the failure to provide
reasons the Minister must be found to have breached the provisions of S6(2)(e)(vi) ,
6(2)(i) and s6(2)(g) of PAJA. The same facts lead to the conclusion that the Minister
did not fulfil his constitutional duty. On either basis, the non-decision must under
s172(1 )(a) of the Constitution be declared to be invalid.
[58] On this finding Wina Njalo has rights that are effected and it could bring this
review.
Wina Njalo's submissions and arguments on the temporary licence RFP
[59] It was submitted that it was competent to challenge the temporary licence RFP
prior to it being awarded. There is no divergence on reviewability between the minority
and majority judgments in the Airports Company South Africa SOC Ltd v Imperial
Group Ltd and Others 2020 (4) SA 17 (SCA) [ACSA-matter]. The facts in the ACSA­
matter were different to the facts in this matter, but the underlying principle is directly
applicable because it would be anomalous to suggest that where an RFP is fatally
defective because the outcome is a foregone conclusion, it could not be reviewed until
the tender process was concluded. Support for this argument is to be found in Waco
Africa (Pty) Ltd tla SGB-Cape v SOC Ltd and Others (57981/2021) [2024] ZAGPJHC
210(4 March 2024) par [29] and Smee (Pty) Ltd v City of Cape Town and Others
(8277/2021; 14097/2021) [2022] ZAWCHC 131 (23 June 2022) paras [90] and [91].
[60] Despite the Minister denying that the temporary licence RFP was structured to
favour lthuba he admitted that "lthuba has the established infrastructure to operate the
lottery" and is in a better logistical position to bid. The Minister also admitted that "it
may well be that lthuba, being the current licensee has an advantage over other
20
potential bidders." From these statements it can be seen that the Minister himself
conflated lthuba Holdings and lthuba Lottery. The Minister also did not address the
inter-relationship between the two entities as addressed in Wina Njalo's
supplementary affidavits.
[61) The factual position between Lottery and Holdings are set out by Wina Njalo as
that both entities are controlled by the Zamani Group. lthuba Lotteries was until
recently dormant. Of the total of the 8 directors of Holdings 6 directors are also
directors of Lottery, Lottery having 7 directors. Both Lottery and Holdings have the
same business address and have the same website "ithubalottery.co.za ". Both entities
have the same company director. The CEO of lthuba Holdings. Ms Mabuza, also a
director of lthuba Lottery, signed the bid validity extension confirmation for lthuba
Lottery's bid.
[62] On these facts it was argued that lthuba Lottery was trading on the goodwill of
lthuba Holdings being the current licensee and could only do so with the knowledge
and consent of lthuba Holdings. If regard is had to the clauses of the temporary licence
RFP the applicant must ensure a seamless transition and uninterrupted contribution
to good causes [clause 2.1.6) and that it can assume immediate responsibility for the
operation of the national lottery [clause 2.1.7). It must provide a contingency plan '
setting out it will achieve a launch date of 1 June 2025 "in the event that the indicative
timelines are exceeded or delayed" [clause 2.5.2]. In view of the timeline only one
bidder applied, namely lthuba Lottery which is in effect the incumbent. Even if the
Minister did not intend to favour one party the effect of the decision is what matters
and is fatal.17 No tenable defence has been advanced justifying this effect and the
review must be granted against the Minister. If that is so, then the defences raised by
the NLC and lthuba Lottery need not be dealt with.
(63) The defence by lthuba Lotteries that Wina Njalo is ignoring the fact that Lottery
and Holdings are two separate legal entities and that Wina Njalo is seeking to pierce
the corporate veil is incorrect. It was argued that the matter has everything to do with
public law requirements and fair administrat ive justice. The process for a temporary
licence with only one possible winner is an entity not materially different from the
17 Oudekraal Estates (Pty) Ltd v City of Cape Town and Others 2004 (6) SA 222 (SCA) at para (25]; Zondi v
MEC for Traditional and Local Government Affairs and Others 2005 (3) SA 589 (CC) at paras (90)-(91)
21
current incumbent. In this matter, as is universal application in our law, substance must
be elevated over form.18
[64] The argument further went that the defence from lthuba Lottery that any bidders
for the temporary licence RFP could have obtained the necessary assets from lthuba
Holdings is based on wrong presumptions . The first is that it was known that the
present incumbent had not bid for the temporary licence. Secondly, it was not known
that the assets of lthuba Holdings would be available in the absence of any obligation
to make it available. Furthermore , that bidders could purchase the assets despite the
clear prohibition of collusion between bidders under the RFP's.
[65] Even if collusion was not a problem because lthuba Holdings did not bid for the
temporary licence the temporary licence RFP remains fatally defective and unfair
because no other bidder than lthuba Lottery was aware of the possibility to buy the
assets from Holdings. The Minister's own affidavit expressed that Holdings applied for
the temporary licence, as did the NLC's affidavit. Wina Njalo did not and could not
have known that lthuba Holdings was not the lthuba entity bidding for the temporary
licence. The Minister's and the NLC's argument is just that they did not intentionally
attempt to favour lthuba.
[66] The proposed just and equitable remedy is to set aside the temporary licence
RFP. If the temporary licence is allowed to stand the unlawfulness continues,
increases and becomes irreversible.19
[67] The concerns about the hiatus in the running of the lottery with severe funding
consequences are misplaced because the NLDTF can easily cover 5-6 months, as
intended, for unforeseen events.
The Minister's submissions and argument on the temporary licence RFP
[68] In essence the Minister submitted that the issue of the awarding of the Fourth
Licence is moot because he had already in his letter of 3 March 2025 indicated that
his intention was to finalise the award of this licence and the conclusion of a licence
agreement by 31 May 2025.
18 Road Traffic Manageme nt Corporatio n v Tasima (Pty) Ltd 2021 (1) SA 589 (CC) at para [149)
19 Al/pay Consolidated Investment Holdings (Pty) Ltd v Chief Executive Officer of the South African Social
Security Agency (No 2) 2014 ( 4) SA 179 (CC) par [27)
22
[69] He also made it clear that he invoked paragraph 8.2.7 of the RFP that reads as
follows:
"The Minister reserves the right to only announce the identity of the Successful
Applicant once the final negotiations regarding the License have been
concluded to his satisfaction. Should negotiations on the final terms of the
License fail to be concluded to the satisfaction of the Minister, the Minister
reserves the right to negotiate with the next ranking Applicant, unless there are
objective grounds for the Minister to negotiate with another Applicant. " He thus
indicated that he intended to announce the successful bidder after negotiations
regarding the licence had been concluded.
[70] In terms of s12B of the Act the Minister can at any time after consultation with
the Board, when the licence has expired, issue a temporary licence on such terms and
conditions he deems appropriate for a non-renewable period not exceeding 24
months. The NLC had only provided him with its report on 11 October 2024 which in
terms of the RFP timetable left the Minster with only two calendar days to consider the
Board's recommendations . This period was completely inadequate. Due to the time
left before the expiry of the licence not affording him enough time to complete his
enquiries and to allow the NLC to negotiate the licence conditions with the winning
bidder, he took the decision to issue the temporary licence RFP. He consulted with
the NLC on this issue on 20 December 2024. The Minister in a bona tide attempt to
ensure the National Lottery continues uninterrupted published the temporary licence
RFP to bridge the gap between the current licence and the Fourth licence.
[71] He denied that the RFP was structured in such a way to favour lthuba. The
Minister appointed the QAC in terms of clause 24.7 of the RFP to gather additional
information to make his decision.
[72] It was argued that the decision to issue the temporary licence RFP is not
administrative action. For the decision to constitute administrative action there must
be a factual enquiry as to whether any rights including prospective rights of the
applicant have been adversely affected.20 It was submitted that Wina Njalo is a public
interest litigant, was invited to participate in the process to tender for the temporary
20 Grey's Marine Hout Bay (Pty) Ltdv Minster of Public Works 2005 (6) SA 313 (SCA) at para [30)
23
licence but chose not to. Wina Njalo has no prospective or other right that will be
adversely affected by this RFP.
[73] The Minister in terms of S 13B(b) of the Act expressly authorises the Minister to
issue a temporary licence if the licence to conduct the national lottery has expired and
"after consultation with the board appoint or authorise any person or organ of state as
the case may be for a non-reviewable period not exceeding 24 months to conduct the
National Lottery on such terms and conditions the Minister may deem appropriate. "
The Minister is only required to consult with the NLC before he makes the appointment
but had consulted with the NLC even prior to issuing the temporary licence RFP.
[7 4] If the decision to issue the temporary licence RFP is reviewed and set aside the
National Lottery will become dysfunctional on 1 June 2025 because it does not have
unlimited funds to bridge the period it will take for the new licensee to establish it in
the market. "The National Lottery has also built up substantial goodwill in the market,
which will no doubt become diluted by competition from gambling organisations, which
are regulated by the various national and Provincial Gambling Acts. Any interruption
in the National Lottery will be detrimental to the national interest, which lies in the
provision of funds for various charities. These charities are extremely vulnerable since
they are entirely dependent on funding from the National Lottery."
[75] If the Court should find that the Minister's conduct in taking the decision to issue
the temporary RFP is unlawful then a just and equitable remedy in terms of s172(1 )(b)
of the Constitution would be to postpone the effective date of such order to the date
on which the successful bidder takes over the National Lottery. The Constitutional
Court has affirmed a court's discretion to suspend a declaration of invalidly where the
potential consequences of an immediate invalidation could lead to undue disruption
and be contrary to the broader interests of justice. 21 In this matter an immediate setting
aside could precipitate a hiatus in the operation of the National Lottery.
Submissions and argument on behalf of the NLC
[76] As the bulk of the allegations made by Wina Njalo must be answered by the
Minister, the NLC only addressed the consultations with the Minister concerning the
impugned decisions and the formulation of the temporary licence RFP. It also
21 Bengwenyama Minerals (Pty) Ltd and Others v Genorah Resources and Others 2011 ( 4) SA 113 (CC)
24
proposed the just and equitable remedy the Court should grant if it declares the
temporary licence RFP decision invalid.
(77] In terms of s10( 1 )(a) the Act the functions of the Board are to advise the Minister
on the issuing of the licence to conduct the National Lottery. It has to do so in applying
the principles of openness and transparency and taking into account the Board's other
functions in terms of the Act. Furthermore, the RFP contains the rules of engagement
and the basis upon which the Minister's conduct and decisions in relation to the licence
must be assessed. The RFP is not "merely an internal prescript that may be
disregarded at whim."22 Clause 5.5 of the RFP records that an application will be
subjected to review and acceptance or rejection of its proposed contractual terms and
conditions by the Minster, "after consultation with the NLC, prior to consideration for
an award of the licence. Clauses 7 .1.5 and 7 .1.6 state that the Evaluation Committee
will present a detailed report of its findings to the Board. The Board will adjudicate the
Applications and prepare a report with recommendations to the Minister. "After
consideration by the Evaluation Committee and adjudication by the Board the NLC will
provide its report with recommendations to the Minister."
(78] There were delays in the licensing process because instead of the 4 expected
applications there were 8 applications. All together the 8 applications consisted of
74 147 pages. The evaluation committee advised the Board of the NLC that it would
not meet the deadline and proposed a completion date of 31 July 2024. This deadline
was again extended to 18 September 2024 due to planning and conducting site visits
across eight jurisdictions worldwide . On 11 October 2024 the Board reported to the
Minister about the adjudication of the licence applications.
[79] On 30 January 2025 the Board received advice from its advisors that the time
remaining to June 2025 was not sufficient for the selection of the successful applicant,
negotiation of the licence and the transition to take over the Lottery that normally
requires five to six months. Several options were put to the Board as how to proceed
and the Board advisers concluded the option of a temporary licence was the most
22 Gidani (Pty) Ltd v Minister of Trade and Industry and Others (81420/2014) (2015) ZAGPPHC 457 (4 July
2015) at para 14. In this regard, this Honourable Court in Gidani cited All Pay Consolidated Investment Holdings
(Pty) Ltd and Others v Chief Executive Officer, South African Social Security Agency and Others 2014 (1) SA
604 (CC) para (40] (Allpay (1)) as authority for this principle and recorded that all parties accepted this to be the
legal position.
25
plausible option. This decision was underpinned by the fact that there could not be a
hiatus in the operations of the lottery as there would be a loss of market share by the
lottery to gambling operators and the gambling market that compete fiercely against
the lottery for participants. It would not be in the public interest to for the lottery to lose
revenue from lottery operations which is used to fund good causes. Lastly it would not
be possible to use reserves to fund good causes "when it was not clear how long it
would take for the Successful Applicant in the Fourth Licence process to be ready to
commence lottery operations. It was also to be considered that the successful
applicant may fail to meet the conditions precedent in the agreement that could
necessitate negotiations with a second ranked bidder. On 10 February 2025 the Board
recommended that the Minister authorise a process for a temporary licence.
[80] On 11 February 2025 the Board instructed the NLC's legal representatives to
draft the provisions of the temporary licence RFP. They in turn obtained technical input
from two technical experts and financial analysis from Genesis Analytics. The legal
representatives also obtained advice from counsel as to what considerations should
inform the temporary licence RFP.
[81] On 21 February 2025 the Board deliberated on the penultimate draft of this RFP
and Genesis assured that the minimum contribution of to the NLDTF of 29,5%
[inclusive of VA TI would be viable for all 8 applicants for a 12 month temporary licence
period. After consideration a closed bid for the RFP was decided upon because the 8
applicants for the fourth licence had demonstrated to varying degrees their financial
capacity and technical know-how on how to operate the lottery and had concluded
agreements with technology partners which would enable them to offer a temporary
licence operation. The Board further recommended that the temporary licence be for
a period of a year and the Fourth licence bidding period also be extended by a year
until 31 May 2026 so as to ensure the completion of the current licensing process. The
12 month period was determined to make the temporary licence viable and attractive
to any potential applicant. If the period was for 6 months or less it would not make
financial sense given the significant costs and effort involved in setting up and
operating the lottery. The Board also recommended that the two processes, the
issuing of the Fourth Licence and the temporary licence be done simultaneously but
separately .
26
{82] The temporary licence RFP was prepared in terms of the Act and there is
nothing in the terms and conditions of this RFP to prove that it was drafted for lthuba.
The RFP had the purpose that the temporary licensee would be able to run the lottery
by 1 June 2025. "It may be a function of incumbency that would be applicable to any
temporary licence awarded at the end of a licence period where the incumbent
licensee is also an applicant. This would be the case where the incumbent's licence
period had previously been extended or not." The perception that lthuba may be more
likely to win is not due to bias from the NLC or its advisors. The Board had the intention
to ensure that the temporary licence would be attractive to all 8 the applicants who
applied for the fourth licence.
[83] The temporary licence RFP was published on the VDR and was open for all
bidders to participate. The Minister need not have consulted with all the bidders but
went a step further by extending the invite to all the bidders. The issuing of a temporary
RFP is not administrat ive action because there was no exclusion of any bidders. It
therefore does not adversely impact on the rights of Wina Njalo.
[84] The decision to issue a temporary licence RFP was rational and lawful because
there was a rational connection between the decision to appoint a temporary licensee
and the achievement of the purpose of the Act. 23 The rationality lies therein that the
appointed temporary licensee will be able to conduct the Lottery to ensure that the net
proceeds are distributed for good causes. The Board approved this RFP as part of its
consultation process with the Minister. Wina Njalo's contention that the temporary
licence is unwinnable on the terms of the RFP does not make the decision irrational.
[85) In terms of s13B(d) the Minister need not consult with the NLC. The Minister
must only consult with the NLC Board when appointing a licensee for the temporary
licence. But in any event, it is denied that the Minister did not consult the NLC. The
letters of 10 February, 26 February and 3 March 2025 proves that there was
consultation between the Minister and the NLC and that the Minister was awaiting the
NLC's advice on the best way forward to continue the national lottery. The Minister
23 Minister of Home Affairs and Others v Scalabrini Centre and Others 2013 (6) SA 421 (SCA) par (65)
27
took the decision, despite not being required to do so after consultation with the NLC
in good faith and serious consideration of the NLC's recommendation.24
[86) If the Court should declare the decisions unconstitutional a Court has a wide
discretion in terms of s172(1 )(b) of the Constitution to grant just and equitable remedy.
Just and equitable was defined as a consideration of fairness to all implicated parties. 25
In Al/pay Consolidated Investment Holdings (Pty) Ltd v Chief Executive Officer, South
African Social Security Agency and Others 2014 (1) SA 604 (CC) par [45) the Court
found that: "If a court finds that there are valid grounds for review, it is obliged to enter
into an enquiry with a view to formulating a just and equitable remedy. That enquiry
must entail weighing all relevant factors, after the objective grounds for review have
been established. "
[87J The NLC proposed that if the Court should review and set aside the temporary
licence the Court should suspend any declaration of invalidity against the temporary
licence RFP for a period of 12 months alternatively for a period until the Minister has
announced a successful bidder. If the suspension remedy is not granted the public
interest will be adversely and irremediably affected. The proceeds of the lottery fund
the NLDTF which is used to fund good causes in terms of s21 of the Act. The reserve
in this fund is currently R2 679 billion. The reserve is to cater for unforeseen events
which may result in the cancellation or suspension of the licence agreement. More
than a third of the fund will be depleted if they are used to fund good causes for the 12
months during the transition to the fourth licence. Even if the transition period is 6
months a significant amount of the reserves would be depleted. It would be imprudent
to use the funds and not rather issue a temporary licence.
[88] Consideration of the public interest is paramount when considering a just and
equitable remedy and this immense public interest outweighs Wina Njalo's private
commercial interest; Wina Njalo stands nothing to lose if the temporary licence is
granted.
lthuba Lottery's submissions and argument on the temporary licence RFP
24 President of the Republic of South Africa and Others v South African Football Union and Others 1999 (4) SA
147 (CC) par [63)
25 Trencon Construction (Pty) Ltd v Industrial Development Corporation of South Africa Ltd and Another 2015
(5) SA 245 (CC) par [47]
28
[89] Wina Njalo had submitted that the temporary RFP will inevitably favour the
incumbent operator because "lthuba" will have the necessary assets and infrastructure
to operate the national lottery at short notice and for the short period of the licence.
However the incumbent is lthuba Holdings and not lthuba Lottery.
[90] lthuba Holdings is a private company that was established as ring-fenced
special purpose vehicle by Zamani Gaming (Pty) Ltd [Zamani Gaming] and later
amended its memorandum of incorporation to provide that its specific purpose was to
run the national lottery. lthuba Holdings holds various fixed assets and electronic
hardware to run the lottery but does not own the software. It partnered with various 8-
BBEE and other investors for the purpose of bidding for the Third Licence and in June
2025 was awarded the Third Licence. The licence was extended for a further non­
renewable term of 24 months until June 2025.
[91] lthuba Lottery bid for the Fourth Licence and the temporary licence. It has also
been ring-fenced for the specific purpose of operating the temporary licence and
Fourth licence. lthuba is not owned by Holdings, have different shareholders and does
not own Holdings assets; lthuba Lottery is a completely different entity to lthuba
Holdings. lthuba Lottery intends to acquire the necessary assets and infrastructure to
run the lottery from lthuba Holdings. Any other bidder can also approach Holdings to
do so.
[92] Wina Njalo's whole premise for attacking the temporary licence is incorrect
because the two lthubas are completely different entities. Wina Njalo should have
known that Holdings did not bid and could not have bid because Uno new bidders who
are not already participating in the Fourth Licence RFP may participate in the
Temporary Licence RFP." Despite joining lthuba Lottery in the supplementary affidavit
it did not correct the error at the heart of its challenge but persists that that the two
lthubas are very closely related parties and de facto the same party.
[93] It was argued that the separate legal identity of lthuba Lottery can only be
disregarded if it was used to commit fraud.26 lthuba Holdings would have to had deal
with the other bidders, not only lthuba Lottery otherwise it would have contravened
s8(1) of the Competition Act. Wina Njalo could have obtained the assets from lthuba
26 The Shipping Corporation of India Ltd v Evdomon Corporation and Another 1994 (1) SA 550 (A) par 566C-F
29
Holdings at no risk of collusive tendering because lthuba Holdings is not a bidder for
the fourth licence. This basis for the review must accordingly be dismissed.
[94] lthuba Lottery had not asserted that it had secured all the assets from lthuba
Holdings but that it intends to acquire the assets and infrastructure from lthuba Lottery
if it is awarded the temporary licence or the Fourth licence. In argument Wina Njalo
now argues that lthuba Lottery will obtain the assets from lthuba Holdings. There is no
basis for this averment and boils down to pure speculation that the Court must reject.
lthuba Holdings is a dominant firm in terms of the Competition Act and in terms of the
Act cannot favour lthuba Lottery.
[95] Any bidder could have approached lthuba Holdings and IGT Global Services
Ltd [!GT], the present owner and operator of the lottery system software to obtain the
assets necessary to operate the temporary licence. Wina Njalo was never at risk of a
collusive practice because lthuba Holdings, Paytronix and IGT are not applicants for
the Fourth Licence or the temporary licence and does not classify as competitors for
the two licences. The averment that due to the interrelated nature of lthuba Holdings
and lthuba Lottery, Lottery would due to the same managerial control with almost the
same directors know if Wina Njalo made any proposal is pure speculation. Wina Njalo
could and should have known that it was at liberty to approach lthuba Holdings by
making cursory enquiries.
[96) The decision to issue the temporary RFP is not reviewable because the RFP
does not exclude a bidder. Reliance on the minority judgment in ACSA does not
support the proposition that it affords Wina Njalo a right to review. In the ACSA matter
the onerous excessive B-BBEE requirements excluded Imperial from bidding all
together. Furthermore , it is only an invitation to bid and Wina Njalo was invited to bid
for this temporary licence but it did not. In Airports Company South Africa v
Tswefokgotso Trading Enterprises CC 2019 (1) SA 204 (GJ) it was found that a party
has no standing to challenge a tender on the basis of alleged unfairness if it had no
effect on its rights.
Decision on the temporary licence RFP
[971 The first issue to be decided is whether the issuing of the temporary licence
RFP, prior to being awarded, constituted administrat ive action that is subject to review.
30
The Minister's decision must be of an administrative nature while exercising a public
power in terms of legislation that adversely affects the rights of any person or has a
direct, external legal effect. In Chairman of the State Tender Board v Digital Voice
Processing (Pty) Ltd; Chairman of the State Tender Board v Sneller Digital (Ply) Ltd
and Others it was found:
"Generally speaking, whether an administrative action is ripe for challenge
depends on its impact and not on whether the decision-maker has
formalistically notified the affected party of the decision or even on whether the
decision is a preliminary one or the ultimate decision in a layered process ...
Ultimately, whether a decision is ripe for challenge is a question of fact, not one
of dogma."27
Also in Grey's Marine Hout Bay (Ply) Ltd v Minister of Public Works28 did the Supreme
Court of Appeal fortified as follows:
"[23) While PAJA's definition purports to restrict administrative action to
decisions that, as a fact, 'adversely affect the rights of any person', I do not
think that literal meaning could have been intended. For administrative action
to be characterised by its effect in particular cases ( either beneficial or adverse)
seems to me to be paradoxical and also finds no support from the construction
that has until now been placed on s 33 of the Constitution. Moreover, that literal
construction would be inconsonant with s 3(1), which envisages that
administrative action might or might not affect rights adversely. The
qualification, particularly when seen in conjunction with the requirement that it
must have a 'direct and external legal effect', was probably intended rather to
convey that administrative action is action that has the capacity to affect legal
rights, the two qualifications in tandem serving to emphasise that administrative
action impacts directly and immediately on individuals[ footnotes omitted]."
[98J This dictum of the Supreme Court of Appeal was endorsed by the Constitutional
Court in Al/pay Consolidated Investment Holdings v Chief Executive Officer, South
African Social Security Agency29 wherein it was confirmed that the requirement to
27 2012 (2) SA 16 (SCA) par [20]
28 2005 (6) SA 313 (SCA)
29 2014 (4) SA 179 (CC)
31
adversely affect the right of a person was probably intended to convey the impugned
decision must have the capacity to affect legal rights.
[99] In Waco Africa (Pty)Ud tla SGB-Cape v SOC Ltd and Others3° the Full Court
of this division applied the finding of the minority in ACSA that tender criteria can be
challenged prior to the evaluation of a tender. I was also referred to Airports Company
South Africa v Tswelokgotso Trading Enterprises CC 2019 (1) SA 204 (GJ) wherein
the Court found that "this irregularity cannot succeed even if a case of unfairness had
been made out because ACSA's rights were not affected: 'The unfairness, if any, is
done to the excluded bidders. They do not complain of their exclusion. It is not unfair
to ACSA. The exclusion of these bidders only affects ACSA if it skewed the competitive
bidding so as to impact the outcome of the tender. No such case is made by ACSA."
[100) I make little of the criticism of Wina Njalo's reliance on the minority judgment in
the A CSA-matter pertaining to whether the temporary licence RFP can be challenged
prior to the evaluation of a tender. The majority judgment did not address whether
Imperial had standing or not, clearly agreeing with this principle finding of the minority.
If pursuant to the analysis of the facts I can find that the RFP did effectively only favour
one party, lhuba Lottery, then the RFP has the capacity to affect the legal rights of
Wina Njalo and it has standing.
[101) I also do not find the Tswe/okgotso judgment a bar to Wina Njalo challenging
the temporary licence RFP. In that matter the Court expressly found that if ACSA had
made out a case that the exclusion of the bidders skewed the competitive bidding so
as to impact the outcome of the tender ACSA would have had standing, but it did not
make out such a case and therefore it failed in its review. I similarly agree with the
finding in Smee {Ply) Ltd v City of Cape Town and Others31 that to challenge a decision
to issue tenders on supposedly objectionable terms is a sound process rather than
participating and then only raising it, but with the rider that the tender has the capacity
to adversely affect legal rights. I further find the finding in Babcock Ntuthuko
Engineering {Ply) Ltd v Eskom Holdings SOC Limited and Others32, sound wherein it
was held:
30 (57981/2021) [2024] ZAGPJHC 210 (4 March 2024)
31 (8277/202 1; 14097/2021) [2022] ZAWCHC 131 (23 June 2022)
32 (64288/2021) (2022) ZAGPPHC 865 (17 November 2022)
32
"It does not behove a tenderer in the position of Babcock to engage in a tender
process well knowing the tender was going to be split, and to then after its
disqualificat ion for other reasons, attempt to review the award on this basis. It
seems to me to have been raised in consequence of a 'belts and braces'
approach to the review, a not unreasonable approach given the importance of
the matter to all concerned."
[102) The foundation for the ground of the review is that the RFP is fundamentally
and irreparably flawed because the RFP is effectively skewed in favour of one party
rendering the outcome a foregone conclusion and thus fundamentally unfair. Only the
Minister, as the decision-maker , can answer this challenge.
[103] The running of the National Lottery of necessity requires equipment and
substantial infrastructure totalling hundreds of millions. To establish the infrastructure
includes the manufacturing and transportat ion of terminals to South Africa together
with the required system integration testing. For the temporary licence RFP a bidder
must demonstrate "operational readiness" and "technical capability to commence full
operations on 1 June 2025." I accept that it is not financially viable for any bidder to
obtain the funds to run the temporary licence for a period of 12 months, unless it has
already run the lottery, will run the Fourth Licence, or can obtain the equipment with
the technical knowhow readily. I also accept that no entity will obtain the finances from
financial institutions without the licence agreement being signed. The proposition that
it would be financially unsound to obtain the equipment for a year because it would be
unlikely to recover the acquisition costs over just a period of a year is accepted.
Furthermore, the time-frame of more or less a month makes it near to impossible to
convince a financial institution to provide the funds necessary. I can accept the above
submissions because it is based on the requirements set out in the RFP with Wina
Njalo's assertions on these requirements not denied, or simply noted, by the Minister
which in terms of Plascon-Evans33 I then must accept.
[104] The Minister did make the concession that "It may well be that lthuba, being the
current licensee has an advantage over other potential bidders." And "lthuba has the
established infrastructure in South Africa to conduct the National Lottery." This is the
Minister's response to averments pertaining to the temporary licence RFP. The
33 Plascon-E vans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A)
33
Minister did not respond at all to the supplementary affidavits of Wina Njalo wherein
the interrelationship between Holdings and Lottery is set out. I have to accept that the
Minister did not differentiate between lthuba Holdings and lthuba Lottery. He did not
dispute the interrelationship between them. The Minister did not answer how, when
alerted by Wina Njalo in their submission the RFP only favoured one party in the letter
dated 5 March 2025, he considered it and the reasons for discarding this concern.
[105] Accepting the Minister's own confusion on who had applied for the temporary
licence RFP, I must accept that Wina Njalo can be excused for accepting that lthuba
Holdings was the bidder for the temporary licence RFP and therefore thought it barred
from approach ing Holdings for a commercial agreement to obtain the equipment and
infrastructure . This is fortified by the NLC in its affidavit similarly not distinguishing
between lthuba Lottery and lthuba Holdings in its opposition , " ... the perception may
be that lthuba is better placed to win the temporary licence application and operate
the temporary licence for the 12 months period is not a function of any bias on the
NLC's and its advisers' part. It may be a function of incumbency that would be
applicable to any temporary licence awarded at the end of a licence period where the
incumbent licensee is also an applicant. "
[106] Even if I could accept that the Minister did not purposefully issue the RFP to
prefer a certain bidder, the RFP most certainly did. Not only the equipment and
infrastructure required, but also the time frames of the RFP rendered the RFP unfair.
The extreme truncated times for assessment , the award and the announcement of the
temporary award did severely limit the 8 applicants who applied for the Fourth Licence,
with the proof being that only 1 of the 8 applied for the temporary licence RFP. The
RFP was issued on 3 March 2025 with applications to be submitted on 31 March 2025.
Assessment of the applications would take place in less than two weeks after the
submissions of the applications and the Minister would make the decision on the
successful applicant within one week of completion of assessment and the temporary
licensee would be appointed on 1 June 2025. This appointed licensee will have to
commence with operation of the National Lottery on the same day. If regard is had to
the Minister's submissions as to how difficult a decision is pertaining to the award of a
licence for the National Lottery these time frames and requirements are simply
inequitable. The only inference on these facts is that the Minister could foresee that
only the incumben t or future incumbent could comply with the RFP as it was running
34
the Lottery and had all of the infrastructure and equipment. As the Minister conceded;
the incumbent would have an advantage.
[107] A tender process cannot have an inevitable outcome or be foreseeable. This is
crucial for ensuring fairness, transparency, and adherence to procurement laws. If the
outcome is predetermined, it undermines the competitive nature of the tender
process. The purpose of a tender is to allow multiple bidders to compete for a contract,
and an inevitable outcome eliminates this competition. The award of a tender as a
forgone conclusion can be seen as a lack of transparency and fairness, as it suggests
that certain bidders are favoured. The lack of competitiveness led to a shortfall in the
procurement process that in turn offends section 217( 1 )(b) of the Constitution. On this
ground alone the temporary licence RFP must be declared to be invalid.
[108] I shortly address the answer that lthuba Lotteries set up, in its own defence, as
an applicant for the RFP. One may ask but how could lthuba Lottery then bid if the
RFP was uncompetitive and unfair. The answer is because it is the sister company of
Holdings and therefore the RFP was effectively eschewed to favour it. As much as I
am aware that Lottery and Holdings are two distinct legal entities a court cannot turn
a blind eye to the fact that with 7 of the same directors the operation of the Lottery is
well-known to Holdings and the newly activated Lottery. The deponent to the affidavit
of Lottery is the Chief Operations and Financial Manager of Lottery, but also the Group
Financial Manager of Zamani Marketing and Management Consultants (Pty) Ltd as
well as a director of Zamani Gaming (Pty) Ltd and sets out in detail the position of
Holdings relating to directors, shareholding etc. He pertinently sets out what
infrastructure and assets Holdings has to run Lottery. He also sets out that Lottery
intends to acquire the assets from Holdings. Ms Mabuza a director of lthuba Lottery,
who is also the CEO of lthuba Holdings signed the extension bid for lthuba Lottery.
[109] On these common cause facts it must be accepted that Wina Njalo cannot be
faulted for not knowing it could approach Holdings to contract a commercial agreement
to buy the assets and infrastructure without entrenching on Competition Law. Whereas
lthuba Lottery would know, due to the interrelationship, and in its affidavit expressed
that that was its intent. One does not need a crystal ball to realise that with the
awakening of lthuba Lottery for the purpose of obtaining the award for the temporary
licence the chances are slim, despite perhaps negotiations with other bidders [if they
35
could have been alive to the fact that they could negotiate] that the commercial
agreement will not go to lthuba Lottery.
[11 OJ I am satisfied that due to the interrelationship Wina Njalo did not have a fair
competitive chance and the RFP's effect was to exclude competitiveness.
[111] The NLC's argument on the temporary licence RFP is that it needed not be
consulted to issue the temporary licence RFP, but only before an award for the
temporary licence is made. I accept their argument in terms of s13B(d) of the Act and
also their argument that they in any event consulted. This is no basis to declare the
temporary licence RFP invalid on this ground.
[112] I had already addressed the NLC itself expressing that it may be the function of
incumbency that a temporary licence would be awarded at the expiry of a licence to
the incumbent licensee. Even if I accept that the NLC had no bias towards lthuba in
drafting the RFP the result thereof is that it does impact on Wina Njalo's rights to bid
for the RFP.
[113] Aside, perhaps in the unique circumstances where the incumbent of the
National Lottery has dominance together with the scarcity of the equipment and
infrastructure the RFP for a temporary licence should cater for this.
[114] Wina Njalo had already on 5 March 2025 informed the Minister that the
temporary licence RFP favoured one party. The Minister reverted that he would
consider the issue and revert, but he never did. The Minister did not address this in
the answering affidavit and the facts put up by Wina Njalo must be accepted. In view
thereof the temporary licence is unfair and uncompetit ive and must be reviewed and
set aside and must be declared under s172(1 )(a) of the Constitution to be invalid.
The remedy
[115] Once a finding of invalidity under PAJA review grounds is made, the affected
decision or conduct must be declared unlawful.and a just and equitable order must be
made under s172( 1 )(b ). A Court must conduct an enquiry in ascertaining a just and
equitable remedy.34 S172 affords a court a wide discretion , without self-censor •ng,
34 Allpay Consolidated Investment Holdings (Pty) Ltd v Chief Executive Officer of the South African Social
Security Agency (No 2) 2014 ( 4) SA 179 (CC) par [45)
36
determined by the specific facts of the matter at hand defined by considerations of
justice and equity. The interests of the public must remain paramount.
[116) It is common cause that should there be an interruption in the operation of the
National Lottery the NLDTF reserves would have to be utilised in the transition period
to fund good causes. It is further common cause that the interruption in the operation
of the National Lottery will substantially deplete the reserves of the NLDTF. The
NLDTF's revenue is allocated to fund charities and charitable activities, the arts, sport
and recreation and other Minister-approved expenditures. A legal limbo of the National
Lottery would threaten to deprive beneficiaries of crucial funding and undermine the
public confidence in the National Lottery. Furthermore , any interruption in the
operation will exacerbate the threats of illegal gambling. The rights and expectations
of Wina Njalo have to be assessed in this context.
[117] In all these circumstances I think that a just and equitable remedy will be to set
aside the temporary licence RFP, but to suspend this part of the order to enable the
continuation of the operation of the National Lottery. I am unconvinced that the period
of 12 months argued for is necessary. When the Minister announces the award of the
National Lottery, on his own version would have invoked clause 8.2.7 of RFP to
already have negotiated the licence agreement , negating having to consider that time
period. The 5 months for the licensee to be operational seems the time period to be
the consideration.
Costs
[118) As for costs it is my view that the costs should follow the result. I did consider
exempting the NLC, but it did actively support the Minister. In this matter the costs of
3 counsel upon retention and employment was justified.
Order
1. The Applicant 's non-compliance with Uniform Rules of Court relating to forms,
service and time periods is condoned , and this application is dealt with as a
matter of urgency under Uniform Rules 6(12).
37
2. Declaring unconstitutiona l, unlawful and invalid, and reviewing and setting aside
the failure by the Minister of Trade, Industry and Competition ("Minister") to
award and issue the Fourth National Lottery and Sports Pools licence ("Fourth
National Lottery Licence"), including the failure to announce the Successful
Applicant and the failure to enter into a Licence Agreement with the Successful
Applicant in terms of the Request for Proposals for the Fourth National Lottery
Licence, RFP Number: NLC RFP 4 ("Fourth Licence RFP").
3. The Minister is ordered to determine a successful applicant for the fourth National
Lottery License by no later than 28 May 2025. The Minister must negotiate a
license agreement by no later than 28 May 2025 with the Fourth Licensee.
4. Declaring unconstitutional, unlawful and invalid, and reviewing and setting aside
the Minister's issuance of the Request for Proposal to operate a Temporary
National Lottery and Sports Pool Licence, RFP Number: NLC TL RFP.
5. Declaring unconstitutional, unlawful and invalid, and reviewing and setting aside
the Minister's decision to extend the bid validity period for the Fourth National
Lottery Licence by an additional 12 months, until 31 May 2026.
6. The Order of invalidity in paragraph 4 is suspended for 5 months for the Fourth
Licensee to take over the operation of the National Lottery.
7. The costs of this application , including the costs of three counsel, are to be paid
jointly and severally by the Minister, the Second Respondent , and the Fifth
Respondent, such costs to be awarded on scale C.
S. POTTERILL
JUDGE OF THE HIGH COURT
38
CASE NO: 2025-039592
HEARD ON: 5 May 2025
FOR THE APPLICANTS : ADV. G. MARCUS SC
ADV. A. COUTSOUDIS
ADY. T. PALMER
ADY. D. SIYE
ADV. D. MUTEMWA
INSTRUCTED BY: Nortons Incorporated
FOR THE 1st RESPONDENT: ADV. P. ELLIS SC
ADV. K. MAGANO
INSTRUCTED BY: Malatji & Co
FOR THE 2No RESPONDENT: ADV. N. MAENET JE SC
ADV. B. LEKOKOTLA
ADV.N.SAKATA
INSTRUCTED BY: Malatji & Co
FOR THE 5TH RESPONDENT: ADY. A. COCKRELL SC
ADV. M. LE ROUX SC
ADV. M. MBIKIWA
ADV. J. DAVIS
INSTRUCTED BY: Roodt Mkhabela
39
FOR THE 5TH RESPONDENT: ADV. I. CURRIE (WATCHING BRIEF)
INSTRUCTED BY: Cliffe Dekker Hofmeyr
DATE OF JUDGMENT: 21 May 2025