THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
CASE NO: 525/2003
Reportable
In the matter between
LONDON CLUBS INTERNATIONAL
(OVERSEAS) INVESTMENTS (PTY)
LTD Appellant
and
THE FREE STATE GAMBLING AND
RACING BOARD First Respondent
THE MEMBER OF THE EXECUTIVE
COUNCIL: FINANCE AND
EXPENDITURE AND ECONOMIC AFFAIRS:
FREE STATE PROVINCIAL
GOVERNMENT Second Respondent
GOLDEN FLAMINGO RESORT (PTY)
LTD Third Respondent
INCITICORP (PTY) LTD Fourth Respondent
VAAL RIVER CASINO (PTY) LTD Fifth Respondent
Coram: Howie P, Zulman, Cameron, Nugent et Van Heerden JJA
Heard: 3 March 2005
Delivered: 31 March 2005
Summary: Free State Gambling and Racing Act 6 of 1996 – interpretation of
s 93(4) – whether responsible Member of the Executive Council
entitled to exercise powers and pe rform functions of Free State
Gambling and Racing Board after expiry of terms of office of
Board’s initial members and before appointment of new members
– if not, whether Appellant entitled to declaratory relief sought in
the court below
JUDGMENT
2
NUGENT & VAN HEERDEN JJA:
Introduction
[1] There are two main issues in this appeal: firstly, whether the second
respondent, the Member of the Execu tive Council: Finance, Expenditure
and Economic Affairs: Free State Pr ovincial Government (the MEC), was
entitled, in terms of s 93(4) of the Free State Gambling and Racing Act 6 of
1996 (the Act), to exercise and perfor m the powers and functions of the
first respondent, the Free State Gamb ling and Racing Board (the Board),
after the expiry of the terms of of fice of the Board’s initial appointed
members and before the appointment of new members. If not, then the
second question to be answered is whether the appellant, London Clubs
International (Overseas) Investments (Pty) Ltd (LCI), was entitled to the
declaratory relief sought by it in the court below.
Background
[2] The Board is a juristic person establ ished in terms of s 2 of the Act,
its existence as such dating from th e commencement of the Act on 31 May
1996. The first members of the Bo ard were appointed by the MEC 1 with
1 In terms of s 4 of the Act.
3
effect from 19 March 1998 and their r espective terms of office expired
simultaneously three years later on 18 March 2001.2
[3] Pursuant to s 13(1) (j)(ii) of the then National Gambling Act 33 of
1996,3 the Free State Province could gr ant a maximum of four casino
licences. The Board invited applications for casino licences for zones 2, 3
and 4 (the Northern, Eastern and Go ldfield zones) in the Free State
Province by notices published in term s of s 30(1) of the Act in the
Provincial Gazette on 8 December 2000 and in the Sunday Times on 10
December 2000. In response to this invitation, LCI obtained a copy of the
Request for Proposal (the RFP) from the Board against payment of the fee
of R5 700. The RFP contained a ‘Sched ule of critical da tes (Timetable)’
which, in terms of para 1.11, pr ovided ‘the anticipated timing of
adjudication of the Free State Casino Development Project’. The Board’s
right to amend or deviate from th e schedule of da tes was expressly
reserved. The date originally stipulat ed in the schedule as the ‘deadline for
submission of detailed pr oposals and notice of app lication’ was 14 March
2001. On 30 January 2001 this deadlin e was extended by the Board to 6
2 In terms of s 4(3) of the Act, membership of the Board includes the Chief Executive Officer (the CEO)
by virtue of his or her office. The CEO is appointed by the MEC, after consultation with the Board
(s 10(1)(a)), and his or her term of office is not limited, unlike that of a Board member appointed under
s 4(1), whose term of office is determined by the MEC, but may not exceed three years (s 7).
3 Repealed in its entirety by the National Gambling Act 7 of 2004, s 45 of which now governs the
maximum number of casino licences that may be granted in the Republic and in each province.
4
April 2001 and the schedule of criti cal dates was revised accordingly.
Notice of this extensi on was subsequently given by the CEO (by letter
dated 5 February 2001) to all ‘app licants’, including LCI, who were
subsequently furnished with copies of the revised schedule.
[4] The terms of office of all the fi rst appointed members of the Board
expired on 18 March 2001. On 29 Marc h 2001, in response to a request
from the CEO of th e Board dated 28 March 2001, the MEC purported to
approve a further extension to 11 May 2001 of the deadline for the
submission of applications for casino licences. Notice of this further
extension was given by the CEO to al l ‘applicants’ (including LCI), by
letter dated 29 March 2001, and such ap plicants were thereafter furnished
with copies of the furthe r revised schedule of dates. At that time, no new
members had been appointed to the Board. (We were advised after the
hearing of this appeal that new members were only appointed with effect
from 21 June 2002, that their respectiv e terms of office all expired on 20
June 2004, and that no new appointments have been made since then.)
[5] In a letter dated 9 May 2001, whic h made specific reference to
s 93(4) of the Act, attorneys repr esenting a company by the name of
Golden Letsema Investments (Pty) Ltd (Golden Letsema), a joint venture
5
consortium of which LCI is appa rently one of th e shareholders, 4 advised
the CEO that –
‘It is … our submission that neither the Chief Executive Officer as delegated authority,
nor the Member of the Executive [Council], has the jurisdiction in the absence of a
Board, to proceed to exercise the functions of the Board and that any actions in the
absence of the Board, will be void.’
[6] Thereafter, in response to a wr itten request dated 19 September
2001 addressed to him by Golden Lets ema’s attorneys, the CEO confirmed
in writing on 2 October 2001 that the terms of office of the appointed
members of the first Board expired on 18 March 2001, and that no specific
powers relating to the casino licensing process had been delegated by the
Board to the CEO before that date. The CEO further informed the attorneys
that ‘section 93(4) of the Free State Gambling and Racing Act, 1996
provides for a transitional arrangemen t pending the appointment of the
Board.’
[7] Neither LCI, nor any one of Go lden Flamingo Resort (Pty) Ltd
(Golden Flamingo), Inciticorp (Pty) Ltd (Inciticorp) and Vaal River Casino
(Pty) Ltd (Vaal River), met the last deadline (6 April 2001) set by the
4 In earlier correspondence between Golden Letsema’s attorneys and the CEO, LCI was identified as the
manager/operator of the casino in respect of which Golden Letsema intended to apply for a Free State
casino licence.
6
Board before the expiry of the terms of office of its appointed members.
LCI also did not submit an applica tion for a casino licence before 11 May
2001 (the deadline as further exte nded by the MEC), while Golden
Flamingo, Inciticorp and Vaal River all did so.
[8] On 13 May 2002, LCI brought an application in the Free State High
Court against the Board for a declaratory order in the following terms:
‘The extension granted on or approximately the 29th March 2001 by the Chief Executive
Officer of the Respondent [the Board] …as well as the revised Timetable…extending
the closing date for the submission of detail ed proposals and notices of application for
the award of a casino licence in the Free State Casino Development Project until the 11
th
May 2001, be declared ultra vires the authority of the said Chief Executive Officer, and
accordingly null and void’.
[9] The MEC, Golden Flamingo, Inc iticorp and Vaal River were
subsequently joined as the second, third, fourth and fifth respondents. At
the hearing of the application in the court below, the or der referred to
above was amended, at LCI’s request, to read as follows:
7
‘The extension granted on or about 29 March 2001 by the second respondent [the
MEC], as well as the approval on or about 29 March 2001 of the revised timetable by
the second respondent, extending the closin g date for the submission of detailed
proposals and notices of application for the award of casino licences in the Free State
Casino Development Project until 11 May 2001 be declared ultra vires the authority of
the second respondent and accordingly null and void’.
[10] Section 93(4) of the Act, on whic h the respondents relied, amongst
other things, in opposing LCI’s application, reads as follows:
‘Notwithstanding anything to the contrary contained in this Act, the responsible
Member5 may exercise and perform the powers and functions of the board, excluding
the granting of any licence, until such time as the board has been appointed in terms of
section 4(1).’
[11] The court a quo (Wright J) held that s 93( 4) of the Act was to be
construed as applying to any appointment to membership of the Board, and
not only to the first appointment of Bo ard members. On th at interpretation
of s 93(4), he held that the MEC w as authorised, in terms thereof, to
perform the powers and functions of the Board in the period between the
expiry of the terms of offices of its original members and the appointment
of new members. The MEC’s decision to approve a further extension of the
5 The member of the Executive Council of the Province responsible for the administration of the Act, in
this case the second respondent (s 1).
8
deadline for the submission of detailed proposals and notices of application
until 11 May 2001 was, therefore, not ultra vires the Act, as was contended
by LCI. Wright J also held that there had been an excessive and
unreasonable delay on the part of LCI in bringing the application, without
any application for condonation or ex tension having been made by LCI.
The learned judge held that each of t hose two findings was fatal to LCI’s
application, which application he ther efore dismissed with costs. He made
no finding in respect of LCI’s locus standi, which was also in issue. It is
against that judgment that the present appeal, with the leave of the court
below, is directed.
Interpretation of section 93(4)
[12] The Board was constituted by the Act as a juristic person having six
members6 (unless the MEC increases the me mbership to a maximum of ten
in terms of s 4(1)(f)).
[13] The Board, thus constituted, came into being when the Act
commenced on 31 May 1996, though it had no capac ity to function until
appointments to office were made. To make those appointments – each for
6 Five members provided for in s 4(1) (a)–(e) and the Chief Executive Officer who is a member ex officio
in terms of s 4(3).
9
a period determined by the MEC but not exceeding three years 7 – an
elaborate process was to be followed. 8 The same process is to be followed
when filling casual vacan cies (vacancies that arise otherwise than by the
effluxion of time)9 in the membership of the Board.
[14] The Board functions through resolu tions passed by its members at
meetings. Its capacity to pass resolutions is not dependent upon a full
complement of members being in office. 10 But it does depend, in practice,
upon whether there are suffic ient members in office to constitute a quorum
at meetings of the Board.
[15] In terms of s 15(3) a quorum is constituted by ‘a majority of the
members of the board’. That is a reference to the membership of the Board
as it is constituted by the Act, as distin ct from the holders of that office
from time to time.11
7 Section 7.
8 The process is provided for in s 6.
9 See Words and Phrases Legally Defined 3 ed (1988) Volume 1 pp 230-231.
10 Section 15(5) permits it to act validly notwithstanding vacancies in its membership.
11 Cf Newhaven Local Board v Newhaven School Board 1885 30 Ch. 350 (CA) in relation to legislation in
similar terms. That distinction between the juristic membership of the body and those who are appointed
to hold that office from time to time is similarly recognised in Tables A (arts 77 and 78) and B (arts 75
and 77) to Schedule 1 of the Companies Act (the standard form Articles for a public and a private
company respectively) relating to a quorum for meetings of directors. See, too, s 8.24(a) of the Revised
Model Business Corporation Act 1984 (United States), summarized in Words and Phrases Legally
Defined: Supplement 2004 p 572. It is also a construction of s 15(3) that gives effect to the apparent
objective of the Act – which is that the regulation of gambling should be entrusted to a multi-disciplined
board – and accords with the language used throughout the Act.
10
[16] The regime created by the Act succeeded various legislative
regimes that were in existence immedi ately before, but came to an end
upon, its commencement, making it necessa ry to provide for a transition.
The legislation that was repealed was the Horse-Racing and Betting
Ordinance 12 of 1956 (Orange Free Stat e), the Horse-Racing and Betting
Ordinance 8 of 1977 (Orange Free Sta te), the Casino Act 19 of 1977
(Bophutatswana), and the Gaming and Betting Act 39 of 1989 (Bophuta-
tswana), insofar as they applied to the Free State province.
[17] That transition is provided for in s 93. Subsection (1) provides for
the continued validity of casino licen ces issued under the repealed legis-
lation. Subsection (2)(a) provides for the continued validity of applications
made under the repealed le gislation. Subsection (2) (b) provides for the
continued validity of li cences and authorities is sued under the repealed
legislation. Subsection (2) (c) provides for the continued validity of rules
and regulations made under the repeal ed legislation. Subsection (2) (d)
provides for the continued validity of anything done in terms of the
repealed legislation. Subsection (3) provides for the vesting in the Board
upon commencement of the Act of al l assets, liabilities, rights and
obligations of a board established in terms of the repealed legislation. The
11
provisions of the final subsection, s ubsec 93(4), are set out in para [10]
above.
[18] Subsection 93(3) was probably intended to refer to the Totalisator
Agency Board (Orange Free State) es tablished in terms of the powers
conferred upon the Administrator by s 9(2) (a) of the Horse-Racing and
Betting Ordinance 1956 (Orange Free St ate), the Orange Free State Racing
and Betting Board established in term s of s 11A of the Horse-Racing and
Betting Ordinance 1977 (Orange Fr ee State), the Liquor Board
contemplated by the Casino Act 1977 (Bophutatswana) (at least insofar as
it regulated casino gambli ng pursuant to that Act), 12 and perhaps to other
boards as well.13
[19] No doubt there was a plethora of licences and authorities, rules and
regulations, and applications and act s, which regulated gambling at the
time the Act commenced, created in terms of, and depe nding for their
validity upon, the repealed legislation. No doubt there were also assets and
liabilities that vested in the boards that regulated gambling at that time.
Clearly the purpose of s 93 was to en sure that that regulating framework
12 The Liquor Board was not established ‘in terms of’ the Casino Act, but rather in terms of the
Intoxicating Liquor Act 36 of 1980 (Bophutatswana), but it had responsibility for various aspects of
casino gambling pursuant to the Casino Act.
13 The repealed Gambling and Betting Act 1989 (Bophutatswana) is not available in the library of this
Court.
12
remained intact, and those assets and liabilities could be administered,
during the hiatus between the repeal of the former legislation and
appointments being made to membership of the newly-created Board.
[20] That s 93(4) serves that purpose – by authorising the MEC to
exercise the powers and functions of the Board during that period – is plain
and is not in dispute. What is in dispute is whether the purpose of the
subsection was exhausted once the initial appointments were made.
[21] Contrary to the view of the court a quo, in our view the purpose of
the subsection was indeed exhausted a nd it had no further application once
the Board first became capable of functioning (by appointments being
made to its membership). It would be unusual for a section that, in terms,
deals in all its subsecti ons with the inevitable hiatus caused by the
transition from one legislative regime to another, to provide, in addition, in
one of those subsections (and then ra ther obliquely) for the consequences
of a possible hiatus of a quite differ ent kind – the hiatus between the board
losing all its appointed members and fr esh appointments being made. It is
unlikely that such an hiatus was ever contemplated by the legislature.
Moreover, the language that is used in the subsection (‘…un til such time as
the board has been appointed in te rms of section 4(1) ’) lends itself to
meaning that once the act contempl ated by that section – appointments
13
being made to membership of the Bo ard – has occurred, the subsection has
no further application. That would be in keeping with the transitional
purpose of the section as a whole.
[22] If the subsection were to be cons trued as applying equally to the
loss of office of all t hose appointed to the member ship of the Board – the
construction advanced by the respondents – a number of anomalies would
arise.
[23] Members of the Board might lose of fice in various ways. They lose
office when their terms of appoin tment expire (which might occur
simultaneously for all the appointed me mbers or in various permutations),
which would require the MEC to agai n exercise the power conferred on
him by s 4(1) to make fresh appointment s. They might also lose office –
either simultaneously or in various permutations – by other means that
result in casual vacancies, which are to be filled by the MEC exercising the
power conferred on him by s 8. The question that comes to mind is why
the statute would confer authority u pon the MEC to assume the functions
of the Board when its appointed member ship is depleted by expiry of their
terms of office (and then only when it occurs simultaneously for them all)
and not when its appointed membership is depleted by the occurrence of a
series of casual vacancies? One asks, as well, what is to happen when, at a
14
time that casual vacancies exist, th e remaining appointed members lose
office by the effluxion of time, for th en any new complement of members
will be appointed only partly in terms of s 4(1) and partly in terms of s 8?
[24] That all points to a further anomal y of a more radical kind. We
have already expressed the view that the board becomes incapacitated in
practice when the number of members in office falls below four (or six if
the MEC has made appointme nts in terms of s 4(1) (f)) which is a quorum
for a meeting of the Board. On the construction advanced by the
respondents the MEC does not step in to perform the functions of the Board
in terms of s 93(4) when the Board be comes incapacitated by the loss of a
quorum (bearing in mind that there rema in in office ‘appointments to the
board in terms s 4(1)’) but only when the appoint ed membership of the
Board is altogether depleted. That would be absurd a nd could never have
been intended, because total depletion has no significance in itself for the
Board’s capacity to perform its functions. (It falls to be remedied by the
MEC’s making new appointments, not by his or her acting as the Board.)
Of course, if the section were to be read as authorising the MEC to act
whenever the Board beco mes incapacitated, it wo uld require the language
of the section to be rewritten materially.
15
[25] Naturally, that absurdity would not arise if a quorum might be as
little as one – a construction of s 15(3) that equates its juridical membership
with the persons who hold that office fr om time to time, which in our view
is not correct – because then the de pletion of the Board would coincide
with the loss of a quorum. But in the circumstances of the present case that
construction would in any event produ ce the same end result. Membership
of the Board includes the CEO by virtue of his or her office (s 4(3)). There
is no suggestion in the present case that the CEO has ever been out of
office and all the indications are to the contrary. The CEO alone constituted
not only the full complement of members in office at the material time, but
also, on that construction of s 15(3) , a quorum capable of conducting the
affairs of the Board, notwithstanding that there were no appointed
members.14 If that is so, it is difficult to see how s 93(4) could have come
into play. Unless it is also to be suggested that s 93(4) comes into play
only when the appointed membership (by which we mean appointments
made in terms of s 4(1)) is depleted – a construc tion that is difficult to
arrive at linguistically. But that, t oo, would produce the further anomaly
that both the sole remaining member (the CEO) and the MEC would each
14 Section 15(5) provides for the validity of acts notwithstanding a vacancy of the Board, which must
include more than one vacancy if further absurdities are to be avoided.
16
simultaneously be vested with the func tions of the Board, which is equally
absurd.
[26] We prefer a construction of s 93(4) that accords with the ordinary
meaning of the language when seen in its context. The apparent objective
of the Act is to place the gambling industry under the control of a multi-
disciplined and independent board. Moreover the subsection in issue
appears amongst a series of subsections that all, in terms, contemplate the
transition from one legislative regime to the next. Viewed within the
context of the overall purpose of the Ac t, and in the context of its location
within that series of subsections, subs ec 93(4) is plainly limited to the
hiatus that is inevitable in the legisl ative transition. That hiatus ends once
the newly created board is capable of functioning as th e language of the
subsection itself suggests.
[27] On that construction the Board would indeed be incapable of
functioning if there are insufficient members in office to constitute a
quorum but we do not find that to be anomalous. First, that need never
happen, other than in rare and unfor eseen circumstances, if the Act is
properly administered, which the legislat ure must surely have had in mind.
In terms of s 195(1) of the Constitution, the basi c values and principles
governing public administration include accountability (s 195(1)(f)) and the
17
promotion of the effici ent, economic and effective use of resources
(s 195(1)(b)). These values and principles , as well as the duty to perform
constitutional obligations di ligently and without delay, 15 govern the
performance by the MEC of al l his powers and functions. 16 Proper
administration of the Act by the MEC surely requires timeous action in the
appointment of new members so as to ensure the continued ability of the
Board to function (which has thus far not been a feature of the
administration of the affairs of this Board).
[28] Secondly, the disruption that might occur if at any stage there were
insufficient members of the Board in office to cons titute a quorum can
largely be avoided by mana gerial foresight – provisi on is capable of being
made for continued admi nistration by delegation. 17 And, as for those
functions that are not capable of bei ng delegated because they have been
entrusted to the Board itself, it seem s to accord fully with the apparent
objective of the Act that performance of those functions should not devolve
upon anyone else, but should be held in abeyance until the Board is
reconstituted.
15 Section 237 of the Consitution.
16 Section 133 of the Constitution.
17 Section 10(4)(a) of the Act.
18
[29] In our view the proper meaning of s 93(4) is that the MEC assumes
the functions of the Board – meaning th e administration of the regime that
ended when the Act commenced – only un til the Board is first constituted
in practice by appointments being made to its membership. That accords
with its ordinary language and with the context with in which it occurs. It
follows that as regards the extensi on of the deadline to 11 May 2001 the
MEC had no authority to assume the func tions of the Board. His decision
to do so was not a valid decision of the Board and thus has no legal
consequence.
Declaratory relief sought by LCI
[30] LCI was aware by no later than 9 May 2001 that the deadline had
been extended by either th e CEO or the MEC. It must also have been
aware by about 2 October 2001 – when it received a respon se to its query
whether the CEO had extended the deadline under delegated authority –
that it was the MEC who had done so in reliance upon s 93(4). The
application for declaratory relief was launched some seven months
thereafter.
[31] We have already pointed out that the learned judge in the court a
quo was of the view that the applicat ion was not brought within a
reasonable time and that it fell to be dismissed on those grounds alone. In
19
support of that finding we were referred by counsel for the respondents to
Wolgroeiers Afslaers (Edms) Bp k v Munisipaliteit van Kaapstad, 18
Hermannsburg Mission v Sugar Industry Central Board,19 and Setsokosane
Busdiens (Edms) Bpk v Voorsitter, Nasionale Vervoerkommissie.20
[32] Those cases concerned applications for judicial review, a remedy
that is described in the ope ning paragraph of Rose Innes: Judicial Review
of Administrative Tribunals in South Africa, as follows: 21
‘Judicial review in our law and practice is a remedy … afforded exclusively to the
Supreme Court whenever the proceedings of inferior courts of law and of administrative
officials, tribunals and authorities have been irregular or illegal, and whereby such
proceedings may be corrected and set aside at the instance of any person whose interests
have been prejudicially affected by those proceedings.’
[33] In proceedings for judicial review a court is called upon to consider
not only whether the administrative act in issue was invalid in law but also
whether it ought to be set aside in fact, for as point ed out by this Court in
Oudekraal Estates (Pty) Lt d v City of Cape Town, 22 our law has always
18 1978 (1) SA 13 (A).
19 1981 (4) SA 278 (N).
20 1986 (2) SA 57 (A).
21 Page 1. The remedy is defined more comprehensively at p 20. See, too, the provisions of Rule 53.
22 2004 (6) SA 222 (SCA) para 26.
20
recognised that even an unlawful administrative act is capable of producing
valid consequences for so long as the unlawful act is not set aside.
[34] It is in the context of the remedy of judicial review that the courts
have developed the rule concerning dela y that is now sought to be relied
upon, and the reason for the courts ha ving done so is plain. The setting
aside of an invalid administrative act ha s the potential to unravel a series of
subsequent acts that might have b een performed on the strength of the
invalid act. Thus a court that is called upon to set aside an invalid act
(which is within its discretion to gran t or to withhold) will in exercising its
discretion take account of delay so as to avoid the disruptive consequences
that might occur if the act is set aside. The consequence of withholding that
relief on account of delay is that the administrative act, though invalid in
law, is ‘validated’ in its effect, 23 with the result that subsequent acts that
were performed on the strength of it wi ll remain legally intact. That is
why, when weighing the question whether the lapse of time should
preclude a court from setting aside an administrative act, delay is not
decisive by itself. What is more impor tant is the extent to which it might
have been acted upon subsequently.24
23 Harnaker v Minister of the Interior 1965 (1) SA 372 (C) at 381C, cited in Oudekraal Estates para 27.
24 Oudekraal Estates para 46.
21
[35] The rule is no more than a pragma tic response by th e courts to the
disruption that might occur if an inva lid administrative act is set aside.
Section 7(1)(b) of the Promotion of Administrative Justice Act 3 of 2000
(PAJA), which is confined to proceedings for judicial review, is similarly
the legislature’s response to the poten tial disruption that might occur if
administrative acts are set aside.
[36] These are not proceedings for judici al review either in form or in
substance. No decision of the Board is said to be invalid or sought to be set
aside. Nor is the MEC’s decision, by it self, relevant to the issue of casino
licences. It is relevant only insofa r as the Board adopts the decision as its
own, and acts upon it accordingly, in which case the Board’s decision to do
so might be capable of being reviewed and set aside. It is precisely because
the appellant alleges that the MEC’s decision is not a decision of the Board
that it has sought declaratory relief. The declaratory orde r that is sought
does no more than declare, in effect, that the decision of the MEC is not a
decision of the Board (although the pray er may not be elegantly phrased).
It does not purport to review or set as ide any act of the Board, nor any act
of the MEC, but merely to declare that the MEC’s act is not that of the
Board and therefore has no legal consequence.
22
[37] The rule against delay, dictated as it is by the nature of judicial
review, is not transposable, without more, to proceedings for declaratory
relief of the kind th at is before us. 25 (Until the Board adopted the MEC’s
decision as its own and acted upon it accordingly, which had not occurred
by the time the application was laun ched, nor could it have done so,
bearing in mind that its membership ha d not been reconstituted, there were
no consequences that might be affected by the inva lidity). Delay might be
a factor that a court will take into account in appropriate cases when
exercising its discretion to grant or withhold declaratory relief, but even
then it is doubtful that delay, by itse lf, will be material if no consequences
have followed from the delay. We do not think that delay has been
material to the exercise of the discretion to grant or withhold the
declaratory relief that was sought.
The discretion to grant declaratory relief
[38] At common law declarations of ri ghts without consequent relief
were not granted by our courts. As pointed out by Innes CJ in Geldenhuys
and Neethling v Beuthin:26
25 In Lion Match Co Ltd v Paper Printing Wood & Allied Workers’ Union 2001 (4) SA 149 (SCA), the
declaratory relief that was sought had the effect of relief that might otherwise have been sought in
proceedings for judicial review (see the orders sought at 153E-F).
26 1918 AD 425 at 441.
23
‘…Courts of Law exist for the settlement of concrete controversies and actual
infringements of rights, not to pronounce upon abstract questions, or to advise upon
differing contentions, however important. And I think we shall do well to adhere to the
principle laid down by a long line of South African decisions, namely that a declaratory
order cannot be claimed merely because the rights of the claimant have been disputed,
but that such a claim must be founded upon an actual infringement.’
[39] That restriction upon the power s of the courts was eased by
s 19(1)(a)(iii) of the Supreme Court Act 59 of 1959, which confers a
discretion upon a court to gr ant declaratory relief not withstanding that the
applicant cannot claim any relief consequential upon the declaration. The
discretion that was conferred to grant or withhold such relief seeks to guard
against the courts being used as a source of legal advice. Thus it has often
been said that although an existing di spute is not a prerequisite for the
exercise of its discretion,27 a court should not grant declaratory relief where
the question that is raised is hypothetical, abstract and academic.
[40] Although the Board had not yet a dopted the MEC’s decision as its
own by the time the application was laun ched (had it done so the act of the
Board in adopting the decision might then, as we have said, itself have been
liable to be reviewed and set aside), it is apparent from the Board’s
27 Ex parte Nell 1963 (1) SA 754 (A).
24
opposition to the proceedings that there is a real prospect that it will do so
when its membership is reconstitu ted. In those circumstances the
declaration that is sought serves no t merely a hypothetical, abstract or
academic purpose, but one that is n ecessary to avoid the Board’s possible
future action being liable to be se t aside if it were to adopt the MEC’s
decision.
Locus standi
[41] There is one further matter that the court a quo found unnecessary
to traverse and that can be dealt w ith briefly. It was submitted by the
respondents that LCI had in sufficient interest in the matter to accord it
locus standi to bring these proceedings. We do not agree. LCI was a
potential applicant for one or more of the casino licences with a direct
interest in the process being conducted according to law and we would not
non-suit it on those grounds.
Costs
[42] The appeal must accordingly succeed and the order of the court a
quo falls to be reversed. (The orde r we intend making am ends the prayer
that was sought in the notice of motion to avoid uncertainty as to its effect.)
25
There is no reason why the costs of the appeal, and of the application,
should not follow the result in each case.
[43] We have pointed out that in the court a quo the Board was initially
cited alone. It opposed th e application. Subsequently the MEC, Golden
Flamingo and Inciticorp were joined by the court a quo as the second, third
and fourth respondents respectively. N one of those parti es filed affidavits
in opposition to the application bu t the learned judge in the court a quo
recorded that Golden Flamingo was represented before him to oppose it. A
simultaneous application to join Vaal River as the fifth respondent was at
first postponed. The fate of that application does not appear from the
record but it must have been granted because Vaal River subsequently filed
affidavits opposing the application and was represented at the hearing in
the court a quo . The Board, Golden Flam ingo and Vaal River thus all
opposed the application and ought to pay the costs of those proceedings.
[44] The Board, the MEC, and Vaal River were the only parties to
oppose this appeal and the costs of the appeal are to be borne by them.
26
Order
1. The appeal is upheld with costs, which are to be paid by the first,
second and fifth respondents jointl y and severally, the one paying
the others to be absolved.
2. The order of the court a quo is set aside and the following is
substituted:
‘(a) It is declared that the second respondent’s decision to extend
the closing date for the submission of detailed proposals and notices
of application for the award of casino licences in the Free State
Casino Development Project until 11 May 2001 was not a valid
decision of the Board and thus has no legal consequence.
(b) The applicant’s costs are to be paid by the first, third and fifth
respondents jointly and severally, th e one paying the others to be
absolved.’
__________________________________
R W NUGENT & B J VAN HEERDEN
JUDGES OF APPEAL
CONCUR:
HOWIE P
ZULMAN JA
CAMERON JA