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[2006] ZACC 6
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Phumelela Gaming and Leisure Limited v Gründlingh and Others (CCT31/05) [2006] ZACC 6; 2006 (8) BCLR 883 (CC); 2007 (6) SA 350 (CC) (18 May 2006)

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CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT 31/05
PHUMELELA GAMING AND LEISURE
LIMITED Applicant
versus
ANDRÉ GRÜNDLINGH First
Respondent
ULRICH OSMUND SCHÜLER Second Respondent
THE
MINISTER OF TRADE AND INDUSTRY Third Respondent
THE NATIONAL
GAMBLING BOARD Fourth Respondent
THE GAUTENG GAMBLING BOARD Fifth
Respondent
MEC, FINANCE AND ECONOMIC AFFAIRS, GAUTENG Sixth
Respondent
Heard on : 15 November 2005
Decided on : 18 May
2006
JUDGMENT
LANGA CJ:
Introduction
[1]
A person who wishes to wager
money on the outcome of a horserace may choose to place a bet with a bookmaker
or on a totalisator.
The two systems are different in that the bookmaker quotes
odds in advance while the totalisator does not fix odds in advance but
pays out
“dividends” in proportion to the amount of money wagered. To the
extent that both rely for their business on
the betting money of the public,
they are in competition. Both operate by virtue of licences issued by the
provinces and their activities
are regulated by provincial
legislation
[1]
within the framework of
national legislation
[2]
and the
Constitution.
[2]
This case concerns a
delictual claim by a totalisator against two bookmakers on the grounds that they
are exploiting its dividend
results in a manner that constitutes unlawful
competition.
The parties
[3]
The applicant is Phumelela
Gaming and Leisure Limited (Phumelela), a public company which has its place of
business in Turffontein,
Johannesburg. It is licensed to operate totalisator
betting in seven of the nine provinces and conducts horseracing at seven of
the
twelve racecourses in South Africa. Phumelela applies for leave to appeal
against the judgment of the Supreme Court of Appeal.
It also seeks direct
access to this Court to challenge certain provisions of the National Gambling
Act 7 of 2004 (the Act).
[4]
Mr André
Gründlingh and Mr Ulrich Osmund Schüler, the first and second
respondents respectively, conduct business
as bookmakers (they will be referred
to collectively in this judgment as “the bookmakers”). The third
respondent is
the Minister of Trade and Industry (the Minister). The fourth and
fifth respondents are the National Gambling Board and the Gauteng
Gambling Board
respectively. The sixth respondent is the Gauteng Member of the Executive
Council for Finance and Economic Affairs.
The
dispute
[5]
Totalisators work on the
basis that all the money placed on any particular betting event is pooled and,
after deductions for administration
fees and taxes, divided equally among the
winners. The amount of money paid out to an individual winner therefore depends
on the
size of the pool and the number of winning
bets.
[6]
The totalisator operated by
Phumelela is a national computerised system for betting on horseracing and other
sports, operating on
and off racecourses throughout the country. Phumelela
currently has approximately 2600 terminals at 220 branches throughout the
country, which are linked to a central computer at Phumelela’s head
office. Bets can also be placed by telephone or on the
internet. The results
of the races and the totalisator dividends to be paid out are publicised widely
by Phumelela at the racecourse,
on television, over a phone-in service, in the
press and on certain radio channels.
[7]
A bookmaker, on the other
hand, fixes odds in advance. A bookmaker may take “fixed odds
bets”, “starting price
bets” and “open bets”,
depending on what the provincial legislation and the bookmaker’s
individual licence
permits. To determine a “fixed odds bet”, a
bookmaker, prior to the race, calculates contingencies on a particular event
happening. With an “open bet” no fixed odds are agreed upon at the
time that the bet is laid, but the amount to be paid
out is dependent on other
contingencies. “Starting price bets” are a sub-category of open
bets and entail an on-course
bookmaker offering the odds that are the average of
all the fixed-odds at the start of the race.
[8]
Apart from a simple bet on
which horse will win a race, there are the so-called “exotic bets”.
These are more complex
in that punters must predict, for example, the winner of
four or six consecutive horse races, or the first to third or first to fourth
places in a particular race in the correct order. As these results are more
difficult to predict, winners are fewer and dividends
larger. This in turn
makes these bets attractive to punters.
[9]
Phumelela approached the
Pretoria High Court seeking an interdict, which the High Court granted,
prohibiting the bookmakers from unlawfully
taking bets which were not
“fixed odds bets”, and from engaging in conduct that amounts to
unlawful competition by using
Phumelela’s published results or dividends
derived from its totalisator pool, as a basis on which to offer or take
bets.
[10]
When the matter came before
the Supreme Court of Appeal on appeal by the
bookmakers,
[3]
the decision of the High Court was reversed on both issues. On the first, the
unanimous finding of the Supreme Court of Appeal was
that the “exotic
bets” that formed the subject matter of the complaint were “fixed
odds bets”, which meant
that bookmakers were perfectly entitled to deal
with them. This aspect has not been pursued any further by Phumelela and no
issue
is made of it in these proceedings. On the second issue, the Supreme
Court of Appeal held by a majority that the conduct of the
bookmakers was not
wrongful and did not constitute the delict of unlawful competition. The
application to appeal to this Court is
concerned only with this
issue.
The Supreme Court of Appeal
[11]
In its majority judgment,
the Supreme Court of Appeal accepted that Phumelela “and its predecessors
have developed a business
system of such reliability and sophistication that it
has earned the trust of the betting public”, and that the “resulting
income potential is part of its goodwill and as such a valuable
asset”.
[4]
The majority in the
Supreme Court of Appeal held that Phumelela’s business system constitutes
property and also inclined to
the view that the bookmakers, in the course of
their business, “appropriate the results of [Phumelela’s] endeavour
to
calculate pay-out dividends, something that is fundamental to the operation
of its totalisator
business.”
[5]
[12]
The Court saw the test for
wrongfulness in the context of an action based on unlawful competition as based
on public policy and the
legal convictions of the community, which would
ordinarily include “not only right-thinking members of the community who
might
be expected to hold a view on the particular topic but also . . . those
involved in the
industry”
.
[6]
In the application of the test, the Court considered that factors which come
into play include:
“an inherent sense of fairplay and honesty; the importance of a free
market and strong competition in our economic system;
the question whether the
parties concerned are competitors; [and] conventions with other countries, like
the Convention of
Paris”.
[7]
[13]
Whilst the majority
judgment accepted that legislative provisions are expressions of policy, it held
that they may, and in the Court’s
view they do in this case, give
expression to the community’s legal
convictions.
[8]
[14]
After reviewing legislative
enactments
[9]
on the issue from as far
back as 1961, the majority of the Court concluded that, “apart from a
short interval of proscription
enacted by the Gauteng Provincial
Legislature”, legislation in the Transvaal (more recently in Gauteng) and
nationally did
not consider it offensive for bookmakers to make use of
totalisator dividends in calculating the payout on exotic bets. The Court
observed that for many years before 1995, such conduct by bookmakers was
expressly permitted and that in terms of the national Act
presently in force it
is
lawful.
[10]
[15]
The Court took the view
that once it was accepted that the practice was legislatively sanctioned and had
been so for a long time,
it could never be said to be unfair or dishonest. It
reasoned that it was unlikely that the legal convictions of the community would,
after a long period where a practice was accepted and legislatively sanctioned,
suddenly turn around and frown upon such
practice.
[11]
It held that the conduct in question was neither unfair nor dishonest and
accordingly did not amount to unlawful
competition.
[16]
In a comprehensive and
careful minority judgment, Comrie AJA disagreed with the majority finding, his
view being that the competition
was
unlawful.
[12]
[17]
I pause here to note that
the national Act referred to in the reasoning of the Supreme Court of Appeal is
the
National Gambling Act 7 of 2004
. The Act was not in force when the
application for an interdict was entertained by the High Court. It only came
into force a few
months before the matter was heard by the Supreme Court of
Appeal.
The application before this
Court
[18]
In this Court, Phumelela
challenges the finding of the Supreme Court of Appeal that the conduct of the
bookmakers is not wrongful.
Phumelela contends that the Supreme Court of Appeal
erred in that it relied on the provisions of the Act as well as various
provincial
enactments but omitted to have any regard to the provisions of the
Constitution when it embarked on its investigation of the legal
convictions of
the community (the boni mores). More specifically, Phumelela contends that the
majority judgment of the Supreme Court
of Appeal failed to develop the common
law, as envisaged in section 39(2) of the Constitution, which requires every
court to promote
“the spirit, purport and objects of the Bill of
Rights” when interpreting legislation, and when developing the common
law
or customary law.
[13]
It was
contended in the alternative that the Supreme Court of Appeal developed the
common law of unlawful competition in a manner
which results in the unlawful
appropriation of Phumelela’s intellectual property, in breach of section
25 of the
Constitution.
[14]
[19]
It bears noting that the
application made to this Court is somewhat different in focus to the case
brought before the High Court and
the Supreme Court of Appeal. In those Courts,
Phumelela’s case was that the bookmakers should be prohibited from using
Phumelela’s
results or dividends as a basis on which to offer bets
because, as it claimed, this constituted the delict of unlawful competition.
In
this Court, however, Phumelela based its case on what it claimed was the failure
of the Supreme Court of Appeal to determine
the wrongfulness of the conduct of
the bookmakers by reference to the provisions of section 39(2) of the
Constitution. It was submitted
that had the Supreme Court of Appeal developed
the common law as it ought to have, it would have recognised Phumelela’s
goodwill
as protectable incorporeal property meriting constitutional protection
under section 25(1) of the Constitution.
[20]
As already stated,
Phumelela also applies for direct access to this Court to enable it, “in
so far as this may be necessary”,
to challenge the constitutional validity
of certain provisions of the Act, in particular the definition of “open
bets”
contained in the Act.
[21]
The bookmakers oppose the
applications and the contentions advanced by Phumelela. No relief is sought
against the third, fourth,
fifth and sixth respondents who, save to a limited
extent only by the fourth
respondent,
[15]
offered no
opposition to Phumelela’s challenge to the judgment of the Supreme Court
of Appeal.
The questions facing this
Court
[22]
It will be convenient for
clarity’s sake to summarise the questions which present themselves as a
result of Phumelela’s
request for leave to appeal. The first relates to
the jurisdiction of the Court. In terms of section 167(3)(b) of the
Constitution,
the Court “may decide only constitutional matters and issues
connected with decisions on constitutional matters”. Once
the
jurisdiction of this Court has been established, the following further questions
arise: (1) Is it in the interests of justice
for leave to appeal to be granted
in this case on the issue of the development of the common law of unlawful
competition? The question
arises because this was not raised or argued in both
the High Court and the Supreme Court of Appeal and is raised for the first time
in this Court. If the answer to this is in the negative, that is the end of the
matter and the application based on this ground
must be refused. If the answer
is in the affirmative, the next question is: (2) Ought the Supreme Court of
Appeal to have developed
the common law in terms of section 39(2) of the
Constitution? Alternatively, in purporting to develop the common law, did it do
so inappropriately, in a manner which results in the arbitrary deprivation of
Phumelela’s intellectual property in breach of
section 25 of the
Constitution? (3) Should the conditional application for direct access to
challenge the definition of “open
bets” in the Act be
granted?
Is there a constitutional
issue?
[23]
The Supreme Court of Appeal
is criticised by Phumelela for an alleged failure to have regard to the spirit,
purport and objects of
the Bill of Rights in the application of the test for
wrongfulness. The application of the Bill of Rights to the current set of
facts
is a constitutional
issue.
[16]
This Court accordingly has the jurisdiction to deal with the application for
leave to appeal. The next question to be considered
is whether it is in the
interests of justice for leave to appeal to be granted on the
issue.
Should the application for leave to
appeal be granted?
[24]
Whether or not to grant an
application for leave to appeal is a matter which is in the discretion of the
Court. Of crucial importance
is what is in the interests of justice. Factors
which may be relevant to the enquiry include: the circumstances of the parties,
the nature of the rights involved, the question whether the issue has been
decided by the Supreme Court of Appeal, the question whether
or not anyone else
might be harmed by the relief sought and the prospects of
success.
[17]
This last-mentioned factor requires Phumelela to show that there is a reasonable
prospect that the Court will reverse or materially
alter the judgment sought to
be appealed against. This Court has however held that although the prospects of
success are an important
factor, they are not necessarily
decisive.
[18]
Ultimately, the
enquiry involves a judgment based on the particular circumstances of each
case.
[25]
Phumelela seeks to invoke
the development of the common law in terms of section 39(2) of the Constitution.
This Court has on a number
of occasions pointed out that when the development of
the common law is in issue it is preferable to have the benefit of a
well-considered
judgment from the Supreme Court of
Appeal
[19]
in order to avoid acting
as a court of first and final
instance.
[20]
Quite clearly, it is also important that litigants should themselves raise the
matter when they believe that the common law is in
need of development. This
should, as far as possible, be raised at the outset of litigation for the
benefit of both the court and
the opposing
litigant.
[26]
However, the failure to
plead section 39(2) in the high court or the Supreme Court of Appeal
specifically does not necessarily and
on its own, bar a litigant from raising
the matter in this Court.
[21]
This
Court also bears the obligation to develop the common law when this is
necessary. What is clear is that the High Courts and
the Supreme Court of
Appeal should at all times view the interpretation of legislation as well as the
development of the common law
and customary law in light of the spirit, purport
and objects of the Bill of Rights. It is accordingly necessary that the
provisions
of section 39(2) should always be borne in mind by these courts.
This is particularly so when the court is engaged with applying
an open textured
normative rule, such as wrongfulness or fairness, to a set of facts. This
obligation was described by this Court
in the following terms in
K v Minister
of Safety and Security
:
“The obligation imposed upon courts by section 39(2) of the Constitution
is thus extensive, requiring courts to be alert to
the normative framework of
the Constitution not only when some startling new development of the common law
is in issue, but in all
cases where the incremental development of the rule is
in
issue.”
[22]
[27]
A court is required to
promote the spirit, purport and objects of the Bill of Rights when
“interpreting any legislation, and
when developing the common law or
customary law”.
[23]
In this
no court has a discretion. The duty applies to the interpretation of all
legislation and whenever a court embarks on the
exercise of developing the
common law or customary law. The initial question is not whether interpreting
legislation through the
prism of the Bill of Rights will bring about a different
result. A court is simply obliged to deal with the legislation it has to
interpret in a manner that promotes the spirit, purport and objects of the Bill
of Rights. The same applies to the development of
the common law or customary
law.
[24]
[28]
The majority judgment of
the Supreme Court of Appeal does not expressly give consideration to the impact
of the Bill of Rights in
its determination of the legal convictions of the
community. It should however not be lightly assumed that the Court did not take
this into account, particularly in view of the decisions of that Court in
Carmichele
[25]
and
Van
Eeden v Minister of Safety and
Security
[26]
where the following
was said:
“The concept of the legal convictions of the community must now
necessarily incorporate the norms, values and principles contained
in the
Constitution. The Constitution is the supreme law of this country, and no law,
conduct, norms or values that are inconsistent
with it can have legal validity,
which has the effect of making the Constitution a system of objective, normative
values for legal
purposes . . . The entrenchment of fundamental rights and
values in the Bill of Rights, however, enhances their protection and affords
them a higher status in that all law, State actions, court decisions and even
the conduct of natural and juristic persons may be
tested against them and all
private law rules, principles or norms, including those regulating the law of
delict, are subjected to,
and thus given content in the light of the basic
values in the Bill of
Rights”.
[27]
[29]
Given the obligation upon
courts to consider the norms, values and principles of our Constitution, it is
perhaps a pity that the Supreme
Court of Appeal did not expressly state what
effect, if any, those norms and values would have on the issues under
consideration
in the present case.
The test
for wrongfulness
[30]
Phumelela does not dispute
that the proper test for wrongfulness in the sphere of delict involves a
determination of what is public
policy and the legal convictions of the
community. That is in fact the approach followed by both the majority and the
minority judgments
in the Supreme Court of Appeal. Phumelela’s submission
is that the legal convictions of the community should have been determined
against the backdrop of the intellectual property protection afforded by section
25 of the Constitution. It contends that the failure
by the Supreme Court of
Appeal to do so precluded it from recognising that Phumelela’s goodwill is
property in terms of section
25 of the Constitution and that the use by the
bookmakers of Phumelela’s published dividends to take bets constitutes the
delict
of unlawful competition.
[31]
The delict of unlawful
competition is based on the Aquilian action and, in order to succeed, an
applicant must prove wrongfulness.
This is always determined on a case by case
basis and follows a process of weighing up relevant factors, in terms of the
boni mores
now to be understood in terms of the values of the
Constitution.
[28]
[32]
Any form of competition
will pose a threat to a rival business. However, not all competition or
interference with property interests
will constitute unlawful competition. It
is accordingly accepted that it is only when the competition is wrongful that it
becomes
actionable.
[29]
The role of the common law in the field of unlawful competition is therefore to
determine the limits of lawful competition. This
determination, which takes
account of many factors, necessitates a process of weighing up interests that
may in the circumstances
be in conflict. Fundamental to a determination of
whether competition is unlawful is the boni mores or reasonableness criterion.

This is a test for wrongfulness which has evolved over the
years.
[30]
[33]
The Bill of Rights
protects the right to property, and also promotes and protects other freedoms,
notably in this case, the right
to freedom of
trade.
[31]
The consequence of the
right to freedom of trade is competition.
[34]
The question is whether,
according to the legal convictions of the community, the competition or the
infringement on the goodwill
is reasonable or fair when seen through the prism
of the spirit, purport and objects of the Bill of Rights. Several factors are
relevant and must be taken into account and evaluated. These factors include
the honesty and fairness of the conduct involved, the
morals of the trade sector
involved, the protection that positive law already affords, the importance of
competition in our economic
system, the question whether the parties are
competitors, conventions with other countries and the motive of the
actor.
[32]
[35]
In the consideration of all
the above factors, the promotion of the spirit, purport and objects of the Bill
of Rights cannot be confined
to the impact of section 25 of the Constitution
alone, as Phumelela seems to suggest. The process of weighing up must include
consideration
of other provisions of the Bill of Rights which might be relevant
to the issue, for example, as has already been mentioned, the right
to freedom
of trade.
[36]
In its judgment, the
Supreme Court of Appeal noted that goodwill is a valuable asset in the sphere of
competition.
[33]
The Bill of Rights
does not expressly promote competition principles, but the right to freedom of
trade, enshrined in section 22
of the Constitution is, in my view, consistent
with a competitive regime in matters of trade and the recognition of the
protection
of competition as being in the public
welfare.
[34]
[37]
It is not permissible for a
litigant to simply carve out those provisions that are favourable to it in the
application of section
39(2). The interests of other holders of rights must
also be taken into account in the balancing exercise. In this case, the section
39(2) exercise would have to balance the goodwill enjoyed by Phumelela against
the rights that may be protected by the right to
trade.
[38]
The constitutional property
clause is not absolute and should not be employed in a manner that ignores other
rights and values. Section
25(1) of the Constitution cannot possibly mean that
it is the right of every property owner to be immunised from all competition.

If the Court were to develop the common law test of wrongfulness to protect
Phumelela’s property rights to the detriment of
the values on the other
end of the scale, it would be discarding the nuanced test that has been
developed through case law.
[39]
The Supreme Court of Appeal
had at its disposal the history of the legislation and the practice of the
gambling public with which
to determine the legal convictions of the community.
The majority of that Court reviewed the legislation and weighed up the impact
of
the other factors it enumerated and came to the conclusion that the conduct
complained of was not wrongful and accordingly did
not constitute unlawful
competition. Subject to the impact of the Bill of Rights, I am unable to fault
either its reasoning or its
conclusion. The Bill of Rights in this respect
merely emphasises the competing principles already at play in the common
law.
[40]
In the circumstances, I
hold that invoking the spirit, purport and objects of the Bill of Rights in this
instance does not produce
the result for which Phumelela contends. Although the
appeal on this aspect cannot succeed, I consider that the application for
leave
to appeal has some merit and should be granted. I turn now to the question
whether the judgment of the Supreme Court of Appeal
results in an arbitrary
deprivation of the intellectual property of Phumelela, in breach of section 25
of the Constitution.
Was there an arbitrary
deprivation of Phumelela’s property?
[41]
It was submitted by
Phumelela that the interpretation placed on the common law by the Supreme Court
of Appeal constitutes an arbitrary
deprivation of Phumelela’s property.
It contended that this deprivation offends against the boni mores and further
that the
wrongfulness test should be developed to incorporate the test for
arbitrary deprivation.
[42]
As already indicated, the
conclusion reached by the Supreme Court of Appeal that the conduct of the
bookmakers did not constitute
unfair competition cannot be faulted. That being
the case, it follows that the judgment of the Supreme Court of Appeal does not
result in the arbitrary deprivation of Phumelela’s
property.
Direct access and the definition of
“open bets” in the
National Gambling Act
[43
]
Phumelela’s
suggestion that the Supreme Court of Appeal wrongly took into account the
provisions of the Act in making its decision
can only be correct if the impugned
section is found to be invalid. The question of invalidity can be considered by
this Court if
the application for direct access is granted. I now turn to that
application.
[44]
Phumelela seeks direct
access to challenge the constitutionality of the definition of “open
bet” in the Act. The Act
defines an “open bet”
as:
[35]
“(a) a bet, other than a totalisator bet, taken by a bookmaker on one or
more contingencies, in which no fixed-odds are agreed
at the time the bet is
placed; or
(b) a bet in respect of which the payout is determined after the outcome of the
contingency on which such a bet is struck became
known, with reference to
dividends generated by a
totalisator”.
[36]
[45]
A “bookmaker”
is defined as:
“a person who directly or indirectly lays fixed-odds bets or open bets
with members of the public or other bookmakers, or takes
such bets with other
bookmakers”.
[37]
[46]
Phumelela contends that it
is possible to read the above provisions in a way that is consistent with the
Constitution. The essence
of this submission is that the definition of open
bets in the Act merely aims to classify bets and does not, in itself, authorise
the use of totalisator dividends by bookmakers. It contends that the effect of
the above provisions is that provincial governments
are able to enact
legislation which will empower a provincial gambling authority to licence
activities which interfere with Phumelela’s
section 25 rights. It
contends further that on the interpretation of the Supreme Court of Appeal, the
Act allows for the deprivation
of some of the most important aspects of
Phumelela’s property rights, including the right to exploit its
intellectual property
for its own commercial gain. According to Phumelela, the
provisions are arbitrary in that they do not provide any reason for such
deprivation; nor is there any relationship between the deprivation and the end
that the Act seeks to achieve, namely the uniform
regulation of gambling.
Furthermore, there is no public purpose that is
served.
[47]
In the event of the Court
however holding that the definition permits the use of totalisator dividends by
bookmakers, Phumelela contends
that the definition of open bets is
unconstitutional.
[48]
For their part, the
bookmakers oppose this part of the application as does the fourth
respondent.
[49]
There was no challenge to
the constitutionality of the provisions of the Gauteng Gambling Act or any other
provincial gambling Act.
It is therefore not necessary for this Court to go
into the question whether there is a duty on provincial legislatures instituting
their own gambling legislation to either declare such bets as unlawful or to
provide for some form of “compensation”
to the totalisator by the
bookmakers.
[50]
The
requirements for the granting of direct access are set out in
Zondi v MEC for
Traditional and Local Government Affairs
, where this Court
held:
“Under these provisions, this Court has discretion whether to grant direct
access but an application will only be granted if
it is in the interests of
justice to grant it . . . [T]he question whether it is in the interests of
justice to grant direct access
must be decided in the light of the facts of each
case. In this regard this Court will consider a range of factors. These include
the importance of the constitutional issue raised and the desirability of
obtaining an urgent ruling of this Court on that issue,
whether any dispute of
fact may arise in the case, the possibility of obtaining relief in another
court, and time and costs that
may be saved by coming directly to this
Court.”
[38]
[51]
Granting
Phumelela direct access on this issue would not be in the interests of justice
since it would mean that this Court would
decide the issue as the court of first
and last instance in a matter of importance in which there is no possibility of
an appeal.
Phumelela has not shown that there are compelling circumstances that
would justify such a course of action and I can find
none.
[52]
In all the circumstances of
this case, the application for direct access to challenge the constitutionality
of the Act must accordingly
be
refused.
Costs
[53]
Although Phumelela has not
succeeded on the issues it raised, I consider that the challenge based on
section 39(2) of the Constitution
is one of considerable importance and that
there should accordingly be no order as to
costs.
Order
[54]
The following order is
accordingly made:
1.
The application for leave to
appeal is granted.
2.
The appeal is
dismissed.
3.
The application for direct access
is dismissed.
4.
There is no order for
costs.
Moseneke DCJ, Mokgoro J,
O’Regan J, Sachs J, Skweyiya J, Van der Westhuizen J and Yacoob J concur
in the judgment of Langa CJ.
For the applicant: DN
Unterhalter SC, JM Heher, JA Cassette, A Gotz
Instructed by Bowman Gilfillan Inc, Johannesburg
For the first and
second respondents: GJ Marcus SC, A Cockrell
Instructed by Swanepoel & Partners Inc of
Nelspruit
c/o Routledge Modise Moss Morris, Johannesburg
For the fourth respondent: SV Notshe SC
Instructed by
Mashile-Nthloro Inc, Johannesburg
[1]
The North West Gambling Act 2
of 2001; the Eastern Cape Gambling and Betting Act 5 of 1997; the Northern Cape
Gambling and Racing
Act 5 of 1996; the Northern Province Casino and Gaming Act 4
of 1996; the Free State Gambling and Racing Act 6 of 1996; the Western
Cape
Gambling and Racing Law 4 of 1996; the Gauteng Gambling Act 4 of 1995; the
Horse-Racing and Betting Ordinance 24 of 1978 (Mpumalanga);
the Regulation of
Racing and Betting Ordinance 28 of 1957 (KwaZulu-Natal).
[2]
The
National Gambling Act 7 of
2004
.
[3]
Gründlingh and Others v
Phumelela Gaming and Leisure Ltd
2005 (6) SA 502
(SCA).
[4]
Id per Farlam et Conradie JJA
at para 33.
[5]
Id at para 34.
[6]
Id at para 40, citing
Lorimar Productions Inc and Others v Sterling Clothing Manufacturers (Pty)
Ltd
1981 (3) SA 1129
(T) at 1153.
[7]
Id at para 40, quoting
Lorimar
above n
6
at 1153.
[8]
Id at para 40.
[9]
Reference was made to (1)
chapter IV of the Betting (Horse Racing) Regulations in Administrator’s
Notice 2944, Official Gazette
Extraordinary, Province of Transvaal dated 29
December 1961; (2) the Horse-Racing and Betting Regulations published under the
Administrator’s
Notice 1916 of 1978 dated 22 December 1978 (Mpumalanga):
these regulations were made under the Horse-Racing and Betting Ordinance
No 24
of 1978; (3) Regulation 13 of the regulations (Provincial Notice 244 of 1992
dated 17 September 1992) which were promulgated
in terms of the (repealed)
Regulation of Racing and Betting Ordinance 28 of 1957 (Kwazulu-Natal); (4) the
Gauteng Gambling Act 4
of 1995; (5) Section 1(e) of Gauteng Gambling and Betting
Amendment Act 1 of 1998; (6) section 1(a) of the Gauteng Gambling Amendment
Act
6 of 2001; (7) the
National Gambling Act 7 of 2004
.
[10]
Gründlingh
above
n
3
at para 39.
[11]
Id at para 42.
[12]
Id at para 30.
[13]
The text of
section 39(2)
reads:
“When interpreting any legislation, and when developing the common law or
customary law, every court, tribunal or forum must
promote the spirit, purport
and objects of the Bill of
Rights.”
[14]
Section 25
reads:
“(1) No one may be deprived of property except in terms of law of general
application, and no law may permit arbitrary deprivation
of property.
(2) Property may be expropriated only in terms of law of general
application—
(a) for a public purpose or in the public interest; and
(b) subject to compensation, the amount of which and the time and manner of
payment of which have either been agreed to by those affected or decided or
approved by a court.
(3) The amount of the compensation and the time and manner of payment must be
just and equitable, reflecting an equitable balance
between the public interest
and the interests of those affected, having regard to all relevant
circumstances, including—
(a) the current use of the property;
(b) the history of the acquisition and use of the property;
(c) the market value of the
property;
(d) the extent of direct state investment and subsidy in the acquisition and
beneficial capital improvement of the property;
and
(e) the purpose of the expropriation.
(4) For the purposes of this
section—
(a) the public interest includes the nation’s commitment to land reform,
and to reforms to bring about equitable access to
all South Africa’s
natural resources; and
(b) property is not limited to land.
(5) The state must take reasonable legislative and other measures, within its
available resources, to foster conditions which enable
citizens to gain access
to land on an equitable basis.
(6) A person or community whose tenure of land is legally insecure as a result
of past racially discriminatory laws or practices
is entitled, to the extent
provided by an Act of Parliament, either to tenure which is legally secure or to
comparable redress.
(7) A person or community dispossessed of property after 19 June 1913 as a
result of past racially discriminatory laws or practices
is entitled, to the
extent provided by an Act of Parliament, either to restitution of that property
or to equitable redress.
(8) No provision of this section may impede the state from taking legislative
and other measures to achieve land, water and related
reform, in order to
redress the results of past racial discrimination, provided that any departure
from the provisions of this section
is in accordance with the provisions of
section 36(1).
(9) Parliament must enact the legislation referred to in subsection
(6).”
[15]
The
fourth respondent has submitted “conditional” written and oral
argument.
[16]
See for example
S v
Basson
[2004] ZACC 13
;
2005 (1) SA 171
(CC);
2004 (6) BCLR 620
(CC) at para 97;
K v
Minister of Safety and Security
[2005] ZACC 8
;
2005 (6) SA 419
(CC);
2005 (9) BCLR 835
(CC)
at para 18;
S v Boesak
[2000] ZACC 25
;
2001 (1) SA 912
(CC);
2001 (1) BCLR 36
(CC) at
para 14;
Carmichele v Minister of Safety and Security and Another (Centre for
Applied Legal Studies Intervening)
[2001] ZACC 22
;
2001 (4) SA 938
(CC);
2001 (10) BCLR 995
(CC) at para 4.
[17]
See
National Education
Health and Allied Workers Union v University of Cape Town and Others
2003
(3) SA 1
(CC);
2003 (2)
BCLR 154
(CC) at paras 25-29;
De Reuck v Director of Public Prosecutions,
Witwatersrand Local Division and Others
[2003] ZACC 19
;
2004 (1) SA 406
(CC);
2003
(12) BCLR 1333
(CC) at para 3;
Brummer v Gorfil Brothers Investments
(Pty) Ltd and Others
[2000] ZACC 3
;
2000 (2) SA 837
(CC);
2000 (5)
BCLR 465
(CC) at para 3;
Member of the Executive Council for Development
Planning and Local Government, Gauteng v Democratic Party and Others
[1998] ZACC 9
;
1998
(4) SA 1157
(CC);
1998 (7)
BCLR 855
(CC) at para 32;
President of the Republic of South Africa and
Others v United Democratic Movement (African Christian Democratic Party
Intervening;
Institute for Democracy in South Africa and Another as Amici
Curiae)
[2002] ZACC 34
;
2003 (1) SA 472
(CC);
2002 (11)
BCLR 1164
(CC) at para 32.
[18]
See
S v Boesak
[2000] ZACC 25
;
2001
(1) SA 912
(CC);
2001 (1)
BCLR 36
(CC) at para 12;
National Education
above n
17
at paras 25-29;
Fraser v Naudé
and Others
1999 (1) SA 1
(CC);
1998 (11) BCLR 1357
(CC) at para 10.
[19]
Carmichele
above n
16
at paras 58-59.
[20]
Id at paras 50-55;
Bruce
and Another v Fleecytex
[1998] ZACC 3
;
1998 (2) SA 1143
(CC);
1998 (4) BCLR 415
(CC) at
para 8;
S v Bequinot
[1996] ZACC 21
;
1997 (2) SA 887
(CC); 1996 (12) BCLR (CC) at para
15. See also the discussion on the granting of direct access below at paras
50-51 of this judgment.
[21]
Carmichele
above n
16
at paras 39-40.
[22]
[2005] ZACC 8
;
2005 (6) SA 419
(CC);
2005
(9) BCLR 835
(CC) at para 17.
[23]
Section 39(2) of the
Constitution.
[24]
Carmichele
above n
16
at paras 33-36.
[25]
Minister of Safety and
Security and Another v Carmichele
2004 (3) SA 305
(SCA) at paras 29-30.
[26]
Van Eeden v Minister of
Safety and Security (Women’s Legal Centre Trust, as Amicus Curiae)
2003 (1) SA 389
(SCA).
[27]
Id at para 12.
[28]
Carmichele
above n
16
at paras 54-56.
[29]
See
Matthews and Others v
Young
1922 AD 492
at 507;
Franschhoekse Wynkelder (Ko-operatief) Bpk v
South African Railways and Harbours
1981 (3) SA 36
(C) at 38-39;
A Becker
& Co (Pty) Ltd v Becker and Others
1981 (3) SA 406
(AD) at 417;
Union
Wine Ltd v E Snell and Co Ltd
1990 (2) SA 189
(C) at 197D-F and 198I-J;
Taylor and Horne (Pty) Ltd v Dentall (Pty) Ltd
1991 (1) SA 412
(AD) at
421-422;
Bress Designs (Pty) Ltd v GY Lounge Suite Manufacturers (Pty) Ltd
1991 (2) SA 455
(W) at 473 and 475. See also Neethling et al
Law of
Delict
4 ed (Butterworths, Durban 2001) at 316; Van Heerden and Neethling
Unlawful Competition
(Butterworths, Durban 1995) at 119.
[30]
See
Atlas Organic
Fertilizers (Pty) Ltd v Pikkewyn Ghwano (Pty) Ltd and Others
1981 (2) SA 173
(T) at 188-189;
Lorimar Productions
above n
6
at 1152-1153;
Bress Designs
above n
29
at 473;
Payen
Components SA Ltd v Bovic Gaskets CC and Others
1994 (2) SA 464
(W) at 474.
See also Van Heerden and Neethling
Unlawful Competition
above n
29
at 68.
[31]
Section 22 of the
Constitution provides:
“Every citizen has the right to choose their trade, occupation or
profession freely. The practise of a trade, occupation or
profession may be
regulated by
law.”
[32]
See
Atlas Organic Fertilizers
above n
30
at 188-189;
Lorimar Productions
above n
6
at 1152-1153;
Elida
Gibbs (Pty) Ltd v Colgate Palmolive (Pty) Ltd (1)
1988 (2) SA 350
(W) at
356-357;
Times Media Ltd v South African Broadcasting Corporation
1990
(4) SA 604
(W) at 606;
Bress Designs
above n
29
at 473 and 475-476;
Aetiology Today
CC t/a Somerset Schools v Van Aswegen and Another
1992 (1) SA 807
(W) at
816-820;
The Concept Factory v Heyl
1994 (2) SA 105
(T) at 115;
Payen
Components
above n
30
at 474. See
also Neethling
Law of Delict
above n
29
at 317.
[33]
Gründlingh
above
n
3
at para 33.
[34]
See Devenish
A commentary
on the South African bill of rights
(Butterworths, Durban 1999) at
301-307.
[35]
Section 1 of the Act.
[36]
Phumelela notes that no
provision is made in the
National Gambling Act for
totalisator licences. These
are regulated at provincial level. Phumelela submits that it is irrational that
the definition should
therefore refer to totalisators.
[37]
Section 1 of the Act.
[38]
[2004] ZACC 19
;
2005 (3) SA 589
(CC);
2005
(4) BCLR 347
(CC) at para 12. See also
Bruce v Fleecytex
above n
20
at paras 4-9;
S v Bequinot
above
n
20
at para 15;
National Gambling
Board v Premier KwaZulu-Natal and Others
[2001] ZACC 8
;
2002 (2) SA 715
(CC);
2002 (2) BCLR
156
(CC) at para 29.