IN THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
REPORTABLE
Case no: 80/04
In the matter between
THE GAUTENG GAMBLING BOARD APPELLANT
and
SILVERSTAR DEVELOPMENT LIMITED FIRST RESPONDENT
RHINO HOTEL AND RESORT LIMITED SECOND RESPONDENT
THE MEMBER OF THE EXECUTIVE
COUNCIL OF THE PROVINCE OF
GAUTENG FOR FINANCE AND
ECONOMIC AFFAIRS THIRD RESPONDENT
THE PREMIER OF THE PROVINCE OF
GAUTENG FOURTH RESPONDENT
Coram: HOWIE P, FARLAM, CLOETE, HEHER JJA and MAYA AJA
Heard: 25 FEBRUARY 2005
Delivered: 29 MARCH 2005
Summary: Review – court a quo substituting its decision for that of
administrative tribunal – when justifiable.
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JUDGMENT
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H E H E R J A
HEHER JA:
[1] When a court reviews and sets aside th e decision of an administrative tribunal
it almost always refers the matter back to that body to enable it to reconsider the issue
and make a new decision. Occasionally th e court does not give the administrative
organ a further opportunity. Instead it makes the decision itself. This is such a case.
The court a quo having reviewed and set aside a refusal by the appellant (‘the Board’)
to award a casino licence to the first respondent (‘Silverstar’) directed the Board to
grant the licence. It refused leave to appeal against both orders but this Court granted
such leave. The Board later abandoned its challenge against the setting aside of its
decision. The dispute between the parties is now confined to whether the court a quo
was right in assuming the decision-making function.
[2] The National Gambling Act, 33 of 1996 lays down uniform norms and
standards which apply to casinos, gambli ng and wagering in the Republic. Section
13(1)(j)(iii) of the Act limits the number of casino licences which may be granted to
40 of which the Gauteng province is entitled to six. The function of granting licences
is left to the provinces.
[3] Gambling in Gauteng is regulated by the Gauteng Gambling Act, 4 of 1995
(‘the Act’). The Board was established in Chapter 2 of the Act to oversee and control
gambling activities in the province. One of its functions is to invite, investigate and
consider applications for casino licences (s 19). Section 31 (in its form before
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substitution by s 12(a) of Act 6 of 2001 with effect from 31 December 2002)
provided as follows:
‘(1) The Board shall, subject to the provisions of section 30 and after having duly considered the
application for a licence, any representations made in relation to the application, the applicant’s
written response thereto, if any, any further information furnished or obtained in terms of section
23, the inspection and police reports contemplated in sections 25 and 26, and any other evidence
tendered to the Board in terms of section 29 or otherwise, grant the application, subject to sub-
section (2), on such conditions as the Board may determine, or refuse the application.
(2) The Board shall not grant a casino licence, route operator or additional gaming licence except
with the concurrence of the Executive Council.’
In short, these provisions empowered the Bo ard either to refuse an application or,
with the concurrence of the Executive Council (‘Exco’), to grant it.
The background to the appeal
[4] In April 1997 the Board issued a public invitation for applications for casino
licences in Gauteng. The invitation said th at the Board intended to grant ‘up to a
maximum of six casino licences’ with the concurrence of Exco. It did not specify the
areas in which the casinos were to be located.
[5] The Board received 23 applications by the closing date in June 1997. It
embarked on a comprehensive process of evaluating the applications according to the
criteria in ss 40 and 41 of the Act. Part of the sifting involved the hypothetical
subdivision of the province into six geographic areas for purposes of comparison and
evaluation. The reasons for doing this seem to have been that the applications
received fell comfortably into the subdivisions, that up to six licences could be issued
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and that the division appeared justifie d by sensitivity studies carried out by the
applicants, which involved the available ‘gaming spend’ and their prospective market
shares of it, and their viability. The areas which the Board identified were the Vaal,
Johannesburg South/Centre, West Rand, East Rand, Johannesburg North/ Midrand
and Pretoria.
[6] The Board compared each applicant for a licence within an area with the other
applicants in that area in relation to each of the criteria. Having regard to these
comparisons it placed the app licants in a preferred order for the appropriate area.
Then it created four clusters (identified by names of animals) of five or six applicants
(the preferred applicants from each area) the object be ing to achieve balanced
groupings which would serve the province as a whole and the areas in question.
Finally the Board selected from the cluste rs that one which it considered best
achieved those objects.
[7] Silverstar and Rhino Hotel and Res ort Limited (‘Rhino’) were the only
applicants for licences in the West Ra nd area. In the comp arative process both
emerged with credit. The Board had no adverse comment on either. It found that the
selection of one of them would not have an impact on any other successful licensee
within the other areas.
[8] At the completion of its deliberations early in 1998 the Board prepared a
memorandum which outlined the process it had followed and set out the advantages
and disadvantages of all the applicants with in the scheme of evaluation that I have
described. In relation to the West Rand area the Board set out its conclusion as
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follows:
‘174. After considering all the findings the Board concludes that Rhino’s project should be ranked
higher than that of Silverstar. Its location in a rural area which is economically depressed, weighed
favourably with the Board.’
[9] The Board then included Rhino in all four of the clusters and it was, of course,
an element of the Giraffe cluster which th e Board considered would best meet the
needs of the province. The approbation of the Board in relation to the contribution
which Rhino would make was expressed in the same form in the context of each
cluster viz the rehabilitation and revitalization of a declining area in the West Rand
and the bringing of leisure facilities to that area.
[10] During the period from February to Ap ril 1998 the Board held six meetings
with Exco to seek concurrence in the grant of casino licences to the applicants in the
Giraffe cluster. One of the issues on wh ich they disagreed was the appropriate
licensee for a casino in the West Rand area. The Board supported Rhino while Exco
favoured Silverstar. They considered the possibility of not granting a sixth licence at
all. The Board contended strongly against that. Its reasons were that it was satisfied
that the gaming spend in Gauteng provi nce could sustain six licences and the
applicants had conducted their studies on the basis that six licences would be granted.
The Board argued that the withholding of a licence would create commercial
uncertainty and the applicants had a ‘legitimate expectation’ that six licences would
be issued. Exco was persuaded and the Board and Exco jointly resolved to issue six
licences.
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[11] As Rhino afterwards fell out of c ontention (for reasons which will be
explained) Exco’s motivation for preferring it is per se no longer of relevance. What
does still matter is why the Board was opposed to Silverstar since the Board continues
to contend that the setting aside of its preference for Rhino does not necessarily
justify the selection of Silverstar in its place.
[12] At a meeting with Exco on 25 February 1998 the Board’s objections to
Silverstar were explained. The Board now adheres to the views which it expressed at
that time and which were embodied in the report prepared for the enlightenment of
Exco which is referred in para [8]. These were:
1. Silverstar provides little development and requires a lot of gambling machines.
2. Rhino’s capital commitment is comme nsurate with its expected revenue;
implicitly Silverstar’s commitment exceeds its projected revenue.
3. Rhino offers better facilities.
4. The market does not require a 1000-s eater conference facility as proposed by
Silverstar. (However, the memorandum prepared by the Board in summary of
its evaluation process speaks of Silver star offering ‘800 square metres of
conference facilities subdivisible into four rooms’.)
5. Silverstar is highly geared. If the generation of income from the casino does
not meet expectations the project will not be viable.
6. The projected revenue of Silverstar exceeds the market spend in the area.
[13] At a further meeting with Exco on 22 March 1998 the Board enunciated the
following objections to granting a licence to Silverstar:
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1. Silverstar relies on cash flow from a temporary casino pending the completion
of its project. If it is unable to meet its margins it will not survive.
2. Silverstar is dependent on a third party loan.
3. Silverstar’s gross gaming revenue is out of proportion to the cost of the project
being 1:1 instead of the norm of 2:1.
4. While Rhino undertakes to donate a poli ce station, a clinic and an agri-village
to the community, Silverstar offers only a portion of land linking its project to
the Witwatersrand Botanical Gardens.
5. Rhino has proximity to a world herita ge site, an advantage which Silverstar
cannot match.
6. The inclusion of Silverstar in a clus ter will result in more machines in the
province thereby exceeding the availabl e market spend of R2,9 billion.
(Silverstar apparently proposed to provide about 1275 gaming ‘positions’ ie
machines and tables whereas Rhino’s application contemplated about 730.)
[14] On 20 April 1998 Exco was persuaded to concur in the grant of the sixth
licence to Rhino. Silverstar applied to the Transvaal Provincial Division to review the
decisions of the Board and Exco. On 11 March 1999 Swart J dismissed the
application against the former but set aside the decision of Exco on the ground that it
had failed to furnish a rational explanation of its support for Rhino’s application.
[15] When Exco reconsidered the matter it reverted to its preference for Silverstar
and declined to concur with the Board’s decision to grant a licence to Rhino. Rhino,
in its turn, sought to review Exco’s refusal.
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[16] On 22 October 1999, however, Rhino’ s application for environmental
approval for its site in the Kromdraai valley was rejected by the responsible Minister
of State. The area was awarded World Heritage status, eliminating any prospect that
Rhino might be able to proceed with its development at its proposed location.
[17] In June 2000 Rhino and Silverstar ma de common cause in a proposal which
served the interests of both. On 1 December 2000 Rhino applied to the Board for the
amendment of its application making provision for the grant of a licence to a newly-
created company, Rhino Resort Ltd, in which both parties would be shareholders.
[18] The features of the combined application which are of moment in the present
context are these:
1. The casino was to be established on the site previously earmarked by
Silverstar, located less than 1 km from the perimeter of the buffer zone of the
World Heritage site.
2. Whereas Silverstar had originally a pplied for permission to operate about 1200
slot machines and 75 tables in its permanent casino, the combined application
set the limits at 700 and 30 respectively, the numbers previously applied for by
Rhino. The Board was requested to consider an automatic increase of at least
30% in the number of gaming positions after the expiry of three years from the
granting of the licence.
3. The shareholders of Silverstar were to become 100% holders of the shares in
the casino owning company on payment of a nominal price.
4. Rhino agreed to issue 5% of the sh are capital for the benefit of empowerment
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groups and individuals from historically-disadvantaged communities within
the Sterkfontein, Kromdraai and Swar tkop area. (Silverstar had already
proposed that more than 51% of the casino-owning company would be owned
by communities and individuals from previously-disadvantaged communities.)
5. Silverstar’s proposed casino manage ment company, Century Casinos West
Rand (Pty) Ltd, would be appointed manager of the joint project, while
Rhino’s nominee, Kairo SA Management (Pty) Ltd, would act as market
consultants.
6. A temporary casino would be located at an existing premises in the Hillfox
area accommodating 700 machines and 30 ta bles while the site was being
developed.
7. The project funding was to be about R580 million financed largely by third
party debt (as the original Silverstar application had proposed) and very much
more dependent on cash flow generation than Rhino had initially postulated.
[19] After a process of notice, objections and a public hearing the Board announced
on 15 November 2001 that it had resolved to allow the amendments and to grant the
amended application subject to the concu rrence of Exco, save that the temporary
casino was to be located at the site of the future permanent development and the
application for the future increase in the number of gaming positions was not
approved.
[20] In November 2001 Exco resolved to c oncur in the Board’s decision. During
February 2002 the sole objector to the combined application, Tsogo Sun Holdings
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(Pty) Ltd, took the decisions on review. Roux J set aside the Board’s decision (and
Exco’s concurrence in it) as an imperm issible substitution of one application for
another.
[21] On 5 November 2002 Silverstar requested the Board to grant its original
application for a casino licence. Rhino supported the request. Silverstar informed the
Board that
‘. . . the imposition, for example, of those conditions which attached to the licence as awarded to
Rhino Resort Ltd would be acceptable to Silverstar.’
[22] The Board considered Silverstar’s request on 4 December 2002 and resolved
that
‘The Board remains of the view Silverstar Development Limited is not the preferred applicant for
the casino licence in the West Rand area.
There are two possibilities with regard to the sixth casino licence namely,
- not to issue a sixth licence
- re-invite applications for the sixth casino licence.’
[23] The Board informed Silverstar of its decision on 6 December 2002. Silverstar
requested reasons. The Board replied on 24 January 2003 that its
‘reasons for not awarding a casino licence to (Silv erstar) are contained in the memorandum the
Board made available during April 1998’, ie the memorandum referred to in para [8].
On 18 February 2003 the Board reiterated that it
‘still holds the view that Silverstar is not the preferred applicant for an award of a casino licence in
the West Rand area and the Board’s reasons are fully set out in its memorandum issued during
1998’.
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[24] Silverstar thereupon instituted the application which gave rise to this appeal,
seeking the review and setting aside of the Board’s refusal to award it the licence and
an order directing the Board and Exco to issue a licence to it. Only the Board opposed
the application. It took up the attitude that, in preferring Rhino as the licensee, it had
necessarily and finally refused Silversta r’s application. Mynhardt J disagreed. He
found that the Board was mistaken in believi ng that the corollary of its decision to
support the grant of a licence to Rhino was a refusal of Silverstar’s application. He
therefore set aside the Board’s purporte d refusal. Although the Board appealed
against that order its counsel now concede that the learned Judge was correct in that
respect because it was incumbent upon the Board to reconsider the application ‘in the
light of the fact that Rhino’s application had fallen by the wayside’.
[25] But Mynhardt J also directed the Board and Exco to award and issue a casino
licence to Silverstar. It is this order which remains under attack in the present appeal.
[26] The learned Judge, applying Unitrans Passenger (Pty) Ltd t/a Greyhound
Coach Lines v Chairman, National Transport Commission and Others; Transnet Ltd
(Autonet Division) v Chairman, National Transport Commission and Others 1999 (4)
SA 1 (SCA) at 7A-8D and 10I-11E, held that the Silverstar’s application for a licence
was already pending before the Board when the Gauteng Gambling Amendment Act,
6 of 2001 (read with Proclamation 18 of 2002 dated 4 December 2002) was passed.
(The amendment which s 12 of that Act effected removed the concurrence of Exco as
a necessary concomitant to the grant of a licence by the Board.) His conclusion that
Silverstar’s application for a licence therefore fell to be decided in terms of s 31 of the
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Act as it read before amendment was not disputed before us. In so far as Exco had
an interest in any relief which the court a quo might grant, it chose to abide the
decision of the court. Since Exco had at all material times supported Silverstar’s
application it was unnecessary for the court a quo to make its order subject to the
approval of Exco.
[27] The learned Judge motivated his decision to order the Board and Exco to grant
the licence as follows:
‘In my view no purpose would be served by remitting the matter to the Board. Silverstar is presently
the only applicant for a casino licence for the West Rand Area. It is common cause on the papers
that it had complied with the minimum requirements that had been set out in the invitation to apply
for licences that were issued by the Board. It was found by the Board during the evaluation process
of the applicants for licences that Silverstar’s proposed project was a viable one and also a
sustainable one. As far back as 9 June 1999 Exco already concluded that Silverstar’s application
was to be preferred to that of Rhino. Exco’s reasons for its conclusions are convincing. [The MEC
and the Premier] abide the judgment of the court. Swart J also said that if the matter before him had
been an appeal, he would have been inclined in favour of Silverstar. In the present matter an
affidavit has been filed wherein [a director of Rhino and of its subsidiary created for purposes of the
failed joint proposal] says that the two compan ies support the allocation of a casino licence to
Silverstar. It appears from the resolution passed by Rhino . . . that it has withdrawn its application
for a casino licence in “Western Gauteng”.
Under these circumstances I am of the view that this court should now bring finality to the whole
saga.’
The legal principles
[28] The power of a court on review to substitute or vary administrative action or
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correct a defect arising from such action depends upon a determination that a case is
‘exceptional’: s 8(1)(c)(ii)(aa) of the Promotion of Administrative Justice Act 3 of
2000. Since the normal rule of common law is that an administrative organ on which
a power is conferred is the appropriate entity to exercise th at power, a case is
exceptional when, upon a proper consideration of all the relevant facts, a court is
persuaded that a decision to exercise a pow er should not be left to the designated
functionary. How that conclusion is to be reached is not statutorily ordained and will
depend on established principles inform ed by the constitutional imperative that
administrative action must be lawful, reasonable and procedurally fair. Hefer AP said
in Commissioner, Competition Commission v General Council of the Bar of South
Africa and Others 2002 (6) SA 606 (SCA):
‘[14] . . . the remark in Johannesburg City Council v Administrator, Transvaal, and Another 1969
(2) SA 72 (T) at 76D-E that “the Court is slow to assume a discretion which has by statute been
entrusted to another tribunal or functionary” does not tell the whole story. For, in order to give full
effect to the right which everyone has to lawful , reasonable and procedurally fair administrative
action, considerations of fairness also enter the picture. There will accordingly be no remittal to the
administrative authority in cases where such a step will operate procedurally unfairly to both
parties. As Holmes JA observed in Livestock and Meat Industries Control Board v Garda 1961 (1)
SA 342 (A) at 349G
“. . . the Court has a discretion, to be exercised judicially upon a consideration of the facts of each
case, and . . . although the matter will be sent back if there is no reason for not doing so, in essence
it is a question of fairness to both sides.” See also Erf One Six Seven Orchards CC v Greater
Johannesburg Metropolitan Council (Johannesburg Administration) and Another 1999 (1) SA 104
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(SCA) at 109F-G.
[15] I do not accept a submission for the re spondents to the effect that the Court a quo was in as
good a position as the Commission to grant or refuse exemption and that, for this reason alone, the
matter was rightly not remitted. Admittedly Baxter, Administrative Law at 682-4, lists a case where
the Court is in as good a position to make the decision as the administrator among those in which it
will be justified in correcting the decision by substituting its own. However, the author also says (at
684):
“The mere fact that a court considers itself as qualified to take the decision as the administrator does
not of itself justify usurping that administrator’s powers . . .; sometimes, however, fairness to the
applicant may demand that the Court should take such a view.”
This, in my view, states the position accurately. All that can be said is that considerations of fairness
may in a given case require the court to make the decision itself provided it is able to do so.’
[29] An administrative functionary that is vested by statute with the power to
consider and approve or reject an application is generally best equipped by the variety
of its composition, by experience, and its access to sources of relevant information
and expertise to make the right decision. The court typically has none of these
advantages and is required to recognize its own limitations. See Minister of
Environmental Affairs & Tourism and Others v Phambili Fisheries (Pty) Ltd;
Minister of Environmental Affairs & Tourism and Others v Bato Star Fishing (Pty)
Ltd 2003 (6) SA 407 (SCA) at paras [47] to [50], and Bato Star Fishing (Pty) Ltd v
Minister of Environmental Affairs and Others 2004 (4) SA 490 (CC) at paras [46] to
[49]. That is why remittal is almost always the prudent and proper course.
The appellant’s attack on the discretion exercised by the court a quo
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[30] The appellant’s counsel raised three matters which they characterized as
absolute bars to the court arrogating the discretion to itself.
[31] First, they submitted, the Board had never considered whether Silverstar should
be granted the licence and it would be wholly inappropriate for the Court to assume
that function without first affording the Board sufficient opportunity to do so. The
submission, as I understand it, is that because the Board chose Rhino as its preferred
candidate and maintained that stance until, at least, the hearing in the Court a quo and
believed, wrongly, that such preference amounted to a refusal of Silverstar’s
application, it never became necessary for the Bo ard to consider what the proper
course should be in the event of Rhino falling by the way.
[32] Second, counsel submitted, the Board has neither decided nor created a
legitimate expectation that all six available licences would be granted. With Rhino’s
departure that discretion wa s still open to the Board and was one which could not
properly be exercised by the court since th e Board was vested by statute with such
exercise.
[33] Third, the six available licences were not by legislation or the Board’s decision
allocated to a particular area (in this case, the West Rand). Rhino secured the Board’s
approval because of its particular merits in the broader context of the best interests of
the province and not because it was necessary to locate a casino on the West Rand.
The Board might, in consequence, upon reconsideration, allocate the vacant licence to
the only remaining West Rand candidate ie Silverstar or to any of the unsuccessful
applicants or to any other applicant w ho might emerge on re-advertisement of the
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licence opportunity.
[34] Although all of these submissions bear a veneer of plausibility none, in my
view, is reconcilable with the proven f acts. Nor does any derive support from the
evidence, ie the factual averments in the affidavits.
[35] The initial comprehensive exercise which the Board undertook was an
assessment of each applicant according to the criteria laid down by the Act. The
object was to ascertain the strong and weak points of each in the context of the
possible grant of the licence to that applicant. Fatal flaws and winning features were
both of high relevance. Then the Board compared candidates (within geographical
limits which it set). That required the Board once again to ask itself which would be
the better candidate and why, a task which could only be carried out by assuming that
each was the successful party. In the exercise of its discretion the Board decided that
Rhino held advantages over Silverstar. It did not expressly find or suggest that
Silverstar was as a whole or in any decisive respect unsuitable; it merely stated a
preference for Rhino and spelled out its r easons. Later when re quired to persuade
Exco (which thought Silverstar the better candidate) the Board was again required to
address the question of which applicant would contribute more to the benefit of the
province. Once again this involved an evaluation of both Rhino and Silverstar as if
each was successful in its application. Once again the Board did not expressly reject
Silverstar; it considered Rhino the better app licant. It subsequently adhered to that
attitude at all material times. So the Bo ard has both considered Silverstar as a
potential licensee and set out its grounds for not selecting it – apart from the stubborn
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adherence to Rhino even after it was no longer a viable candidate, the Board has
stated on more than one o ccasion that its reasons for rejecting Silverstar are to be
found in its memorandum of April 1998. The attitude of the Board has at all stages
amounted to a de facto refusal of its application albe it that it may not have had an
equivalent effect in law. Why the Board needs to bring its mind to bear on the issue
again is not rationally explained.
[36] Counsel is correct in submitting th at the Board was under no statutory
compulsion to grant six licences. But after careful consideration it recommended six
applicants to Exco which, perhaps hopi ng to avoid dissension, then expressly
requested the Board to defend its decision to award a sixth licence. Spokesmen for the
Board explained that all applicants knew that six licences were available, all had been
requested to prepare and justify their applications on the assumption that six licences
would be awarded and in the circumstances possessed a ‘legitimate expectation’ that
the assumption would be realised. Exco was persuaded. The five licensees who were
immediately successful must have conducted their affairs in the belief that a sixth
operator would emerge sooner rather than later. Neither the Board nor Exco
questioned the need for and desirability of a sixth licence when Rhino and Silverstar
submitted the combined application. The Board did not in its answering affidavit in
the present litigation set out any facts which might support a decision to withhold a
sixth licence now. In the circumstances it appears to me that even making the
suggestion approaches the level of frivolous ness. It should be emphasized that the
Board accepted from the time of its initial evaluation that the proposed operations of
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Rhino and Silverstar would have no adve rse effect on any other licensee. The
reference to a ‘legitimate expectation’ in counsel’s submission on this aspect (and
also in the context of Silverstar’s entitlement to a licence) calls for a reminder that in
the present state of the law’s developmen t, such an expectation does not found a
claim for substantive relief but merely protects procedural fairness: Meyer v Iscor
Pension Fund 2003 (2) SA 715 (SCA) at paras 25 to 28. For a contrary view cf
Campbell, Legitimate Expectations: The Potential and Limits of Substantive
Protection in South Africa (2003) 120 SALJ 292.
[37] The West Rand area entered into the li cence equation in the circumstances I
have described in paragraph [5] as a result of the Board’s considered appraisal that
that area formed a natural catchment of gaming demand and spend which could
satisfactorily be served by one licencee and for which there were two possible
applicants. Nobody appears to have faulted that judgment then or subsequently. All
subsequent cluster evaluations, identifications and the grant of five licences as well as
the litigation in respect of the sixth were conducted with the West Rand as a given
(and appropriate) location for the sixth li cence. The applicant’s replying affidavit
informs us that all five initial licences we re granted subject to a condition that no
competing licence was to be granted for 20 y ears; that surely leaves only the West
Rand as the potential home of a further casino in Gauteng. This objection is also
entirely without substance.
The inevitability of the outcome
[38] For the reasons which follow I am sa tisfied that despite the manifest
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advantages which the Board holds (by co mparison with a court) as a decision-
maker, the particular facts of the presen t case are such as to remove it from the
limitations imposed by the general principles outlined in paragraph [31].
1. Applications, like trials, depend on evid ence not conjecture. The Board, despite
ample opportunity, has laid no basis in fact or expert opinion, to suggest that a
reasonable possibility exists that, upon balanced reconsideration, it will make a
finding adverse to Silverstar.
2. The Board brought to bear the informati on and expertise at its disposal in its
evaluation of the applications in 1997 and in respect of the combined
application in 2001. The court a quo had and this Court on appeal has the
benefit of all that input in the contemporaneous reports prepared by the Board.
3. The combined application was, in subs tance if not in form, an application by
Silverstar on Silverstar’s terms, a r eality which the Board has either not
appreciated or has chosen to ignore.
4. The Board approved the combined application. In doing so the Board
(a) approved the Silverstar site;
(b) approved the manageme nt and control of the operation including the real
possibility of an acquisition by Silverst ar of all Rhino’s shares in the
casino operator;
(c) abandoned the two major grounds of preference for the Rhino
application, ie location in an underdeveloped rural area and the
provision of benefits to a disadvantaged community;
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(d) accepted that social benefits offe red by the Rhino application (but not
by Silverstar), such as employee housing and a clinic, would become
unnecessary because of the proximity of such facilities to the new site;
(e) accepted without apparent qualm aspects of the Silverstar application at
which the Board had baulked in 1998, such as the high gearing of the
project.
5. Counsel was unable to refer us to any apparently material distinction between
the combined application as approved by the Board and the original Silverstar
application save for the aspect of the number of gaming positions, a problem
which was overcome by Silverstar’s te nder of acceptance of the conditions
which the Board had imposed in approving the combined application.
6. There is no suggestion that re-advertisement of the application will draw any
other interested applicant or produce a proposal superior to that of Silverstar.
The relative merits and demerits of S ilverstar’s application have received
exhaustive ventilation by the Board and Exco and during the court
proceedings. There is no unresolved issue.
[39] Taking all the matters which I have referred to in the preceding paragraph into
account no objection of substance enunc iated in the 1998 memorandum remains
unanswered. No countervailing or additiona l objections have been raised by the
Board. The result is that the court a quo was not merely in as good a position as the
Board to reach a decision but was faced with the inevitability of a particular outcome
if the Board were once again to be called upon fairly to decide the matter.
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Fairness
[40] That nothing is to be gained by remittal is also relevant to the issue of fairness.
The Board both in its answering affidavit and through counsel emphasized its role as
a guardian of the public interest in the control and regulation of gambling interests. It
sought, in the vaguest terms, to suggest that reconsideration of the licence would
carry with it the benefits of greater insight into social conditions and economic facts
as they affect and are affected by gambling than the Board could have possessed in
the earlier stages of the application process. No facts or circumstances were relied on
to support such an inference. On the papers which were before the court a quo lack of
fairness to the Board or the reasonable possibility of prejudice to the public were not
probable consequences of non-remittal. But there are equitable considerations which
favour Silverstar: the delay which has r eached substantial proportions (in some
degree the responsibility of the Board, in pers istently backing an application, in its
changing forms, that was doomed to fail) and the unswerving opposition of the Board
to Silverstar based on a motivation largely superseded by events and inconsistent with
its own approach to the combined application together with the raising of obstacles
(the ‘absolute bars’) which were obviously of dubious merit to shore up an insecure
case. Silverstar has well-founded grounds fo r believing that the Board has lost its
objectivity.
Conclusion
[41] I conclude that this is an exceptional case and that the court a quo did not err
when it decided against remittal to the Board.
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[42] I would therefore dismiss the appeal. The learned Judge simply ordered the
Board to grant the licence. He made no reference to the tender by Silverstar to submit
its application to relevant conditions imposed by the Board in the combined
application, a tender which counsel repeated before us. It will be appropriate to
amend the order of the court a quo to take account of that situation.
[43] The following order is made:
1. The appeal is dismissed with co sts including the costs consequent upon
the employment of two counsel.
2. Para 2 of the order of the court a quo is deleted and replaced by the
following:
‘The First and Third Respondents ar e ordered to award and issue a
casino licence for the West Rand area to the Applicant in terms of the
Gauteng Gambling Act, 4 of 1995 on the terms set out in its 1997
application but subject mutatis mutandis to the conditions contained in
paragraphs 30, 31 and 34 of the Memorandum of the First Respondent
entitled “Application for Amendment of Casino Licence Application by
Rhino Resort Limited” dated 14 November 2001.’
___________________
J A HEHER
JUDGE OF APPEAL
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HOWIE P )Concur
FARLAM JA )
CLOETE JA )
MAYA AJA )