Case Law[2022] ZASCA 80South Africa
Peermont Global (North West) (Pty) Ltd v Chairperson of the North West Gambling Review Tribunal and Others and Two Other Cases (1040/2020;1055/2020;1056/2020) [2022] ZASCA 80 (2 June 2022)
Supreme Court of Appeal of South Africa
2 June 2022
Judgment
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## Peermont Global (North West) (Pty) Ltd v Chairperson of the North West Gambling Review Tribunal and Others and Two Other Cases (1040/2020;1055/2020;1056/2020) [2022] ZASCA 80 (2 June 2022)
Peermont Global (North West) (Pty) Ltd v Chairperson of the North West Gambling Review Tribunal and Others and Two Other Cases (1040/2020;1055/2020;1056/2020) [2022] ZASCA 80 (2 June 2022)
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sino date 2 June 2022
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not
Reportable
Case
no: 1040/2020
In
the matter between:
PEERMONT
GLOBAL (North West) (PTY) LIMITED
APPELLANT
and
CHAIRPERSON
OF THE NORTH WEST
GAMBLING REVIEW
TRIBUNAL
FIRST RESPONDENT
NORTH
WEST GAMBLING REVIEW
TRIBUNAL
SECOND RESPONDENT
CHAIRPERSON
OF THE NORTH WEST
GAMBLING
BOARD
THIRD RESPONDENT
NORTH
WEST GAMBLING BOARD
FOURTH RESPONDENT
JONOFORCE
(PTY) LTD
FIFTH RESPONDENT
PIONEER
BINGO (NORTH WEST)
(PTY)
LTD
SIXTH RESPONDENT
LATIANO
560 (PTY)
LTD
SEVENTH RESPONDENT
ELIOCUBE
(PTY)
LTD
EIGHTH RESPONDENT
METRO
GAMING AND
ENTERTAINMENT
(PTY) LTD
NINTH RESPONDENT
and
Case
no: 1055/2020
In
the matter between:
GALAXY
BINGO MORULENG (PTY) LTD
(previously
called Metro Gaming and
Entertainment
(Pty) Ltd)
FIRST APPELLANT
GALAXY
BINGO NORTH
WEST (RF) (PTY)
LTD
SECOND APPELLANT
and
NORTH
WEST GAMBLING BOARD
FIRST
RESPONDENT
CHAIRPERSON
OF THE NORTH WEST
GAMBLING
BOARD
SECOND RESPONDENT
CHAIRPERSON
OF THE NORTH WEST
GAMBLING
REVIEW TRIBUNAL
THIRD RESPONDENT
DENNIS
MAKHARI NO
FOURTH RESPONDENT
AMOS
VILAKAZI NO
FIFTH RESPONDENT
JONOFORCE
(PTY)
LTD
SIXTH RESPONDENT
MEC
FOR FINANCE, ECONOMY
&
ENTERPRISE DEVELOPMENT,
NORTH
WEST
SEVENTH RESPONDENT
and
Case
no: 1056/2020
In
the matter between:
GALAXY
BINGO MORULENG (PTY) LTD
(previously
called Metro Gaming and
Entertainment
(Pty) Ltd)
APPELLANT
and
NORTH
WEST GAMBLING BOARD
FIRST RESPONDENT
CHAIRPERSON
OF THE NORTH WEST
GAMBLING
BOARD
SECOND RESPONDENT
CHAIRPERSON
OF THE NORTH WEST
GAMBLING
REVIEW TRIBUNAL
THIRD RESPONDENT
DENNIS
MAKHARI NO
FOURTH RESPONDENT
AMOS
VILAKAZI NO
FIFTH RESPONDENT
LATIANO
560 (PTY) LTD T/A GOLDRUSH
BINGO
NORTH WEST-MAFIKENG
SIXTH RESPONDENT
MEC
FOR FINANCE, ECONOMY
&
ENTERPRISE DEVELOPMENT,
NORTH
WEST
SEVENTH RESPONDENT
Neutral
citation:
Peermont Global (North
West) (Pty) Ltd
v Chairperson of the
North West Gambling Review Tribunal and Others and Two Other Cases
(Case numbers 1040/2020); 1055/2020 and
1056/2020
[2022] ZASCA 80
(2 June 2022)
Coram:
MAYA P, MAKGOKA, PLASKET and GORVEN JJA
and MUSI AJA
Heard:
16 and 17 FEBRUARY 2022
Delivered:
2 June 2022.
Summaries:
Peermont
v Chairperson of the North West Gambling Review Tribunal and Others
Administrative
law – review – legality
–
the
lawfulness and fairness of the licence application process in terms
of the North West Gambling Act 2 of 2001 (the North West
Act) –
whether the licence application process was procedurally unfair,
given that (a) the applicable Request for Applications
was not
provided to the appellant, and (b) allegedly incomplete copies of the
bingo licence applications were made available for
public inspection
– whether electronic bingo terminals (EBTs) to be provided for
play offered the game of ‘bingo’
as defined in the North
West Act – whether the North West Gambling Board failed to have
regard to the adverse impact that
the licence of bingo operations was
likely to have on the appellant’s nearby casinos.
Galaxy Bingo
Moruleng (Pty) Ltd and Another v North West Gambling Board and Others
(in re Jonoforce (Pty) Limited)
Administrative
law – review – legality
–
whether
the decision to grant the application of the sixth respondent,
Jonoforce (Pty) Ltd, for a bingo licence at Klerksdorp was
unlawful –
whether fact that a portion of the sixth respondent’s
application for a bingo licence was marked confidential
and not
publicly disclosed, violated ss 32(3)
(a)
and 24(5)
(d)
of
the North West Act and rendered the award pursuant thereto
procedurally unfair – whether the impugned decisions were
inter
alia
irrational, unreasonable and based on
a failure to consider relevant considerations.
Galaxy Bingo
Moruleng (Pty) Ltd v North West Gambling Board and Others (in re
Latiano 560 (Pty) Limited)
Administrative
law – review – legality – whether the decision of
the North West Gambling Board, to grant the application
of Latiano
560 (Pty) Ltd
, for a
bingo licence in Mahikeng was unlawful – whether the decision
was made on the basis of an arithmetical error –
whether the
reasons given by the Board did not reflect the decisions actually
made, alternatively, show that the Board considered
irrelevant
considerations and failed to consider relevant ones.
ORDER
On
appeal from: North West Division of the High Court, Mahikeng (Djaje J
sitting as court of first instance):
In the
Peermont
appeal
The
appeal is dismissed with costs, including the costs of two counsel.
In
the
Galaxy
appeal
(in
re
Jonoforce)
The
appeal is dismissed with costs, including the costs of two counsel.
In
the
Galaxy
appeal
(in
re
Latiano)
The
appeal is dismissed with costs, including the costs of two counsel.
JUDGMENT
Makgoka
JA (
Maya P, Gorven, Plasket JJA
and Musi AJA concurring):
Introduction
[1]
This judgment concerns three
appeals, namely:
Peermont Global (North
West) Pty Ltd v Chairperson of the North West Gambling Review
Tribunal and Others
(the Peermont
appeal) under case number 1040/2020;
Galaxy
Bingo Moruleng (Pty) Ltd and Another v North West Gambling Board and
Others (in re: Jonoforce (Pty) Limited)
(the
Galaxy appeal in
re
Jonoforce) under case number 1055/2020;
and
Galaxy Bingo Moruleng (Pty) Ltd v North West Gambling Board and
Others (in re Latiano 560 (Pty) Limited)
(the
Galaxy appeal in
re
Latiano) under case number 1056/2020.
[2]
The three appeals concern the
awarding of bingo licences by the North West Gambling Board to
Jonoforce (Pty) Limited and Latiano
560 (Pty) Limited. Peermont
Global (NW) (Pty) Limited (as an objector) and Galaxy Bingo Moruleng
(Pty) Limited (as a co-competitor),
were unsuccessful in their review
applications in the North West Division of the High Court, Mahikeng
(the high court) to set aside
the awarding of those licences. The
review applications were heard together in the high court and a
composite judgment, dismissing
the three applications, was delivered.
[3]
On appeal, this Court similarly
heard the three appeals together. In the three judgments, I consider
the
Peermont
appeal,
while Musi AJA considers both the
Galaxy
appeal
(in re
Jonoforce
)
and the
Galaxy
appeal
(in
re
Latiano).
The issues in the three appeals overlap, and for that reason, the
three judgments should be read together and collectively
as a
trilogy.
[4]
I turn to the Peermont appeal. The
appellant, Peermont Global (NW) (Pty) Limited (Peermont) appeals
against an order of the North
West Division of the High Court,
Mafikeng (the high court), which dismissed its application to review
and set aside the decisions
of the fourth respondent, the North West
Gambling Board (the Board), taken on 10 June 2016 to award bingo
licenses to, among others,
the fifth respondent, Jonoforce (Pty) Ltd
(Jonoforce) in Klerksdorp and to the seventh respondent, Latiano 560
(Pty) Limited (Latiano),
in Mmabatho, respectively. Both areas are in
the North West Province (the North West).
[5]
Peermont was not an applicant for
any of the awarded bingo licences. It objected to the awarding of
those licences on the basis
of the likely negative impact bingo
operations would have on its casinos in the areas where the two
licences had been awarded for
bingo operations. Prior to its review
application in the high court, Peermont had sought, unsuccessfully,
to set aside the Board’s
decisions in an internal review before
the North West Gambling Review Tribunal.
The legislative and
regulatory framework
[6]
It is necessary to first set out the
legislative and regulatory framework within which the Board
considered the bingo licence applications
and made the impugned
decisions. Gambling is an area of concurrent provincial and national
competence. Nationally, it is regulated
by the National Gambling Act
7 of 2004 (the National Act), while the relevant provincial
legislation is the North West Gambling
Act 2 of 2001 (the North West
Act). In its preamble, the North West Act notes, among other things,
that gambling should stimulate
the creation of employment
opportunities and provide a source of public revenue for the
province.
[7]
Section 30 of the National Act
provides that each provincial licensing authority has exclusive
jurisdiction to grant provincial
licences in respect of gambling.
Pursuant thereto, s 3 of the North West Act provides for the
establishment of the Board as a juristic
person. Section 4 of the
North West Act set outs the powers and functions of the Board, which,
among others, include: (a) overseeing
gambling activities in the
province; (b) exercising such powers and performing such functions
and duties as may be assigned to
the Board in terms of the Act or any
other law; and (c) inviting applications for licences and considering
such applications. The
Board also has the power to make and enforce
rules for the conduct of its proceedings and hearings, and to consult
with any person
or employ consultants regarding any matter relevant
to the performance of its functions on such terms and conditions as
it may
determine.
[8]
The composition of the Board is
provided for in s 5, in terms of which the Board shall consist of
nine members from diverse fields.
Four of them are appointed by the
relevant Member of the Executive Council (the MEC) for their
respective expertise in law, accounting
and auditing, welfare or
socio-economic development and the tourism industry. Three of the
members are designated by each of the
MECs for Economic Development
and Tourism, Safety and Liaison, Finance and Provincial Treasury. Two
members shall be appointed
on the basis of having either proven
business acumen, a knowledge of the gambling industry, or who are
otherwise suitable for appointment
as members of the Board. In
addition, the Chief Executive Officer (the CEO) of the Board shall
ex
officio
be a member of the Board but
shall not be entitled to vote.
[9]
Any person wishing to apply for a
gambling licence may only do so if the Board has published a notice
in a Provincial Gazette inviting
applications for a specific type of
gambling licence. The Board would invite applications for a specific
gambling licence only
after it had determined the need for a specific
gambling licence in the province. In this matter the Board resolved
that there
was a need to issue bingo licences in the province.
[10]
The procedure for applying for
licences is set out in
ss 24-28. In terms
of s 24(2), ‘[n]o person shall make an application for a
licence … unless the application is
lodged pursuant to and in
accordance with a notice inviting applications which has been
published by the Board in the
Provincial
Gazette
’. In terms of s 29, upon
receipt of an application for a licence, the Board is required to
publish notice of the application
in the Provincial Gazette as well
as a local newspaper, containing the material particulars of the
application and inviting ‘interested
persons’ to lodge
written representations and to indicate whether they wish to make
oral representations in response to the
application.
[11]
In terms of s 24(3) all applications
for licences shall be considered and disposed of according to the
procedures determined by
the Board. And in terms of s 24(4) the Board
may conduct or cause to be conducted any hearing, investigation or
enquiry in relation
to any application submitted under the Act.
Section 28 provides that any application for the grant of a licence
shall be lodged
in the manner and form determined by the Board and be
accompanied by the documents and information determined by the Board
and
by payment of the prescribed application fee. In the event of
non-compliance with the above, the application shall be invalid.
After considering an application, the Board may grant or refuse or
postpone the consideration of an application, subject to any
terms or
conditions it may deem fit. Section 29 requires the Board to give
public notice of licence applications that it has received,
and to
invite interested persons to make representations on those
applications. Section 32 requires the Board to make such
applications,
as well as any representations and responses that it
receives, open to public inspection or to provide them on request.
Sections
35 and 36 compel the Board to hold public hearings in
respect of every licence application it has received.
[12]
Section 90 provides for an internal
remedy against decisions of the Board, to the Tribunal, which
consists of an advocate or retired
judge; one member designated by
the National Gambling Board from the staff of the said Board; and one
member appointed on the basis
of proven business acumen or other
suitability to serve on the Tribunal. The Tribunal has the power to:
(a) confirm or set aside
the decision or proceedings of the Board;
(b) remit the matter to the Board with an order to take a decision in
accordance with
the correct procedure; or (c) take such a decision as
in its opinion ought to have been given by the Board and direct the
Board
to do everything necessary to give effect to that decision.
Request for
Applications
[13]
These relevant provisions of the Act
must be read with a document titled ‘Request for Applications’
(the RFA). This
is a comprehensive document prepared and authorised
by the Board pursuant to s 28(1). It sets out, among other things:
the Board’s
purpose in relation to bingo licences; the
objectives of licensing bingo operations; the principles applicable
to bingo operations;
the processes for licence applications’;
and the criteria applicable to the evaluation of such applications.
The initial
RFA was dated March 2015. It was later replaced by the
amended RFA in October 2015. The amended RFA states its purpose as
being
‘to furnish interested parties and all prospective
applicants for Bingo Operator licences with a clear indication of the
regulatory requirements, the underlying principles applicable to the
licensing of Bingo Operators, the process and criteria applicable
to
the licensing of such applicants’.
[14]
The amended RFA states that the
Board wished to achieve certain objectives such as: economic growth
and development in the province;
the upliftment and economic
empowerment of historically disadvantaged communities; generation of
additional revenue for the province;
the promotion of economic
activities in the province; and the provision of entertainment, sport
and recreational facilities to
members of the public.
[15]
The amended RFA further states that
bingo operations were seen as supplementary to casinos in achieving
the following objectives:
(a) the diversification and expansion of
the existing gambling activities in the province; (b) the provision
of additional alternative
forms of leisure and entertainment to all
areas in the province, in particular to the townships and rural
communities; (c) the
opening of the gambling sector and the creation
of opportunities for direct participation of local previously
disadvantaged individuals
and small, medium and micro-sized
entrepreneurs; (d) the provision of job opportunities in the
previously disadvantaged areas;
(e) the eradication of illegal
gambling in the province; and (f) the promotion of Broad-Based Black
Economic Empowerment (B-BBEE)
to increase the participation of women
and designated groups in the gambling sector.
[16]
As to the designated areas
identified for bingo operations, the RFA states that the Board had
identified the need for bingo licences
in those areas after
considering the ‘potential socio-economic impact on the
community of the proposed licensee’. The
Board therefore
preferred ‘… that Bingo Operations be established in
such areas where inadequate entertainment facilities
presently exist
and would require strong motivation of any application where the
intended Bingo Operation will be situated within
the same town or
city with a casino.’
[17]
With regard to the principles
applicable to bingo operations, the RFA mentions, among others, that
an applicant must have at least
60% shareholding by local previously
disadvantaged individuals, of which 35% must be held by black women,
with full exercisable
voting rights and economic interests. Also,
that the Board will consider the promotion of B-BBEE in the bingo
market as vital to
any application.
Factual background
[18]
On 2 October 2015, pursuant to s
24(2) of the North West Act, the Board published a notice in which it
invited ‘interested
parties’ to apply for the grant of
bingo licences in the North West. The notice mentioned that the RFA
had been amended,
and that a copy of the amended RFA would be
available to ‘interested parties’ at the offices of the
Board between 2-9
October 2015 upon payment of a non-refundable fee
of R3 000. It is common cause that Peermont did not procure the
amended
RFA.
[19]
On 26 November 2015, the Board
published a notice detailing a number of applications it had
received, which included those of Jonoforce
and Latiano. The
applications lay open for public viewing for one month, from 1
December to 31 December 2015. In terms of s 29
of the North West Act,
the Board invited written objections (if any) to be submitted within
the viewing period. Pursuant to that
notice, Peermont called for, and
obtained, public-inspection copies of various applications from the
Board. On 24 December 2015,
Peermont submitted written objections to,
among others, the Jonoforce and Latiano applications. On 2 February
2016, the Board informed
Peermont that its objections were based on
the old version of the RFA dated March 2015 and not the amended RFA.
Peermont requested
to be furnished with the amended RFA, which
request the Board declined on the basis that its availability had
been time bound,
as provided for in the October notice.
[20]
During May 2016, the Board held
public hearings in respect of all of the applications, which Peermont
attended and made oral and
written submissions against the
applications. On 10 June 2016, the Board made the decisions to award
bingo licences to Jonoforce
and Latiano, among others. The Board
announced its decisions publicly by notice in the Provincial Gazette
on 6 July 2016.
The internal review
application and in the high court
[21]
On 6 July 2016, Peermont launched an
internal review application in terms of s 90 of the North West Act
before the Tribunal, seeking
to review and set aside the impugned
decisions. Peermont raised five grounds of review before the
Tribunal, of which only three
are relevant for present purposes.
First, that the licence application process was procedurally unfair.
Second, that it was unlawful
for the Board to award bingo licences
for use in conjunction with conventional electronic bingo terminals
(EBTs), as EBTs did not
offer the game of ‘bingo’ as
defined in the North West Act. Third, that the Board was obliged, but
failed, to have
regard to the adverse impact that the licensing of
bingo operations was likely to have on Peermont’s nearby
casinos.
[22]
In its written decision dated 29
August 2017, the Tribunal considered each of these review grounds,
and found no merit in any of
them. It accordingly dismissed
Peermont’s internal review application with costs. Peermont
applied to the high court to overturn
the Tribunal’s decision.
The high court, too, dismissed that application. In broad outline,
the high court agreed with the
reasoning of the Tribunal, save to
correct an error by the Tribunal of granting a costs order against
Peermont. The Tribunal does
not have a power to make such an order in
its proceedings. In this Court, Peermont persisted in the three
review grounds referred
to above. I consider those grounds, in turn.
Procedural unfairness
of the licensing process
[23]
Peermont relied on two subsets for
this proposition. The first was that the amended RFA, on which the
licence applications and the
impugned decisions were based, was not
disclosed to it. The second was that the public-inspection versions
of the applications
unlawfully excluded significant portions of the
applications that were material to Peermont’s ability to object
to the applications.
Each of these, so was the submission, inhibited
Peermont’s ability to make meaningful and informed
representations on the
applications, and consequently infringed its
right to procedural fairness.
Non-disclosure of the
amended RFA
[24]
With regard to the amended RFA, as
mentioned already, on 2 December 2015 the Board published a notice in
the provincial gazette
which clearly informed ‘interested
parties’ that the RFA had been amended, and that a copy
thereof, was available upon
request and against payment of a set fee.
A time period for such requests was set between 2 to 9 October 2015.
[25]
It was submitted on Peermont’s
behalf that the pre-conditions to access the amended RFA applied to
prospective licence applicants,
and could not lawfully be invoked
against interested parties seeking to exercise their rights to object
to the applications after
they had been lodged. For that reason, it
was submitted, Peermont had no reason to procure a copy of the RFA in
October 2015 because
it did not intend to apply for a bingo licence.
It also did not know at that point which bingo-licence applications
would be lodged
and their intended locations. It learned of the
applications and the close proximity of the intended bingo operations
to its casinos
only on 26 November 2015, when the Board published the
November notice. As with any other objector, it had reason to request
the
amended RFA only at that time, rendering it impossible for
Peermont to comply with the Board’s deadline of 9 October 2015.
[26]
I disagree. By reason of it being a
major player in the gambling industry in the North West, Peermont
was, even by October 2015,
very much an interested party in the
awarding of gambling licences in the province. The phrase ‘interested
parties’
is sufficiently wide to include both potential
applicants and objectors. Therefore, Peermont’s attempt to
confine ‘interested
parties’ to ‘applicants’
is simply not sustainable. In any event, on a plain reading of the
amended RFA, nothing
precluded Peermont from obtaining it. Thus,
Peermont was entitled to obtain a copy of the amended RFA, but
elected not to do so.
It has only itself to blame for not having had
sight of the amended RFA before it made its objections.
[27]
It was also suggested on behalf of
Peermont that the Board’s refusal to furnish it with the
amended RFA outside the set period
was unlawful. I do not agree. In
terms of section 28 of the North West Act, the Board is empowered to
determine the manner and
form of the applications. In this regard,
the Board determined that the amended RFA would be furnished upon
request within the
set time period and upon payment of the requisite
fee. It was perfectly entitled to do so. It was thus in accordance
with its own
processes that the Board declined to furnish the amended
RFA to Peermont outside the allotted purchase window period.
[28]
Peermont
asserted that that the Board’s decision was unlawful, but did
not challenge it. Until competently set aside, that
decision has
force.
[1]
Peermont contends that
it was not obliged to challenge the decision, as such a challenge
would have been premature and incompetent
‘because the Board’s
refusal to provide the amended RFA was merely one exercise of the
Board’s functions in a
larger administrative process’. It
also cited a number of practical difficulties that such an
application would have occasioned,
including unnecessary litigation
and possible delay in the determination of the bingo applications.
[29]
Regarding
the prematurity argument, it is important to note that the Board is
an organ of State. Its refusal to furnish Peermont
with the amended
RFA outside the window period, constituted ‘an administrative
action’, defined in s 1 of
the
Promotion of Administrative Justice Act 3 of 2000 (
PAJA)
as a ‘decision’ taken by an ‘organ of state’,
‘exercising a public power or performing a public
function in
terms of any legislation’ ‘which adversely affects the
rights of any person and which has a direct, external
effect…’
[2]
[30]
The Board’s October 2015
notice, which contained the pre-conditions for obtaining the RFA, is
sourced from the North West
Act. When it made a decision refusing to
furnish Peermont with the amended RFA, it exercised a public power in
terms of that legislation.
On Peermont’s own version, the
Board’s decision adversely affected its rights, and undoubtedly
had a direct and external
effect. Thus, the Board’s decision
was clearly final and susceptible to review under PAJA. Therefore, it
would not have been
premature to challenge the Board’s
decision.
[31]
There was another string to Peermont’s
prematurity bow: it was contended that
courts
would not permit a review of a process that is underway if any
potential prejudice could be cured in the process itself.
For this
proposition, Peermont relied on
Rhino
Oil and Gas Exploration SA (Pty) Ltd v Normandien Farms (Pty) Ltd and
Another
[2019] ZASCA 88
;
2019 (6) SA
400
(SCA) paras 30-34 (
Normandien
).
That case concerned an attempt to review an administrative decision
which had not been taken, but was anticipated. The issue
was whether
the failure by the South African Agency for Promotion of Petroleum
Exportation and Exploitation SOC Limited, a State-owned
company, to
comply with certain statutory provisions, which regulate public
participation, in an application for an exploration
right, was
reviewable. This Court held that while failures to comply with
statutory duties are reviewable under the common
law, the
applicant for review had to show that the failure gave rise to
prejudice. Furthermore, it held that the application to
review
was not ripe and the applicant ought to have waited until
after the exploration right was granted to launch its
challenge.
Thus, the application could not succeed.
[32]
In contrast, here Peermont’s
express intention was to participate in, and influence, the process
of awarding bingo licences
by meaningful and informed representations
on the licence applications. It alleged that its ability to do so was
prejudiced by
the Board’s refusal to furnish it with a copy of
the amended RFA. That decision was final, and the Board made it very
clear
to Peermont that it was not amenable to furnish the amended RFA
outside the set period. There is nothing in the Board’s
correspondence
with Peermont to suggest that the Board was inclined
to reverse its decision. And nothing in the bid adjudicating process
could
alter it.
Normandien
therefore goes against Peermont’s proposition, and is thus
inapposite on this score.
[33]
Peermont also relied on a passage in
one of the related interim interdict judgments, where Hendricks J
said the following about
this issue:
‘
There
is no doubt that two different RFA forms existed, namely the RFA form
and the amended RFA form, which was not provided to
Peermont. This is
fatal. It can never be correct to contend that it was not necessary
to make available to an objector the amended
RFA form on which the
decision to award the licence was based, and then argue that the
objector in any event had sight of the previous
RFA form and could
base its objections thereon. This is unfair towards the objector and
an infringement of his/her right to object’.
[34]
In my view, Peermont’s
reliance on this passage is misplaced. First, the learned judge was
only making prima facie findings
in the context of an interim
interdict, based on the facts then before the court. Those findings
were certainly not binding on
the high court when it determined the
main review application, and less so, on this Court. But in any
event, it seems Hendricks
J was, with respect, wrong to the extent he
suggested that the Board was, without more, obliged to provide
Peermont with a copy
of the amended RFA. It was Peermont’s duty
to request the copy and to comply with the conditions set by the
Board, namely
to request the copy within the stipulated time and to
pay the required fee.
[35]
In the final analysis, the
over-arching consideration about the Board’s refusal to furnish
Peermont with the amended RFA,
is one of prejudice. As a matter of
fact, Peermont made substantive objections and fully participated in
the public hearings. It
has not explained, with reference to any
portions of the amended RFA, how it was not able to comment
meaningfully because of lack
of access to it. Peermont’s
assertion of prejudice must also be tested by considering its stance
before and after it received
the amended RFA. It first had sight of
the amended RFA when the Board produced the record of its decision in
the internal review
process. It is telling that having received the
amended RFA, Peermont’s objections remained as they had been,
when it did
not have the amended RFA. Peermont did not seek to amend
or supplement any of its grounds of objection after obtaining the
amended
RFA. This, in my view, diminishes Peermont’s contention
that by not having a copy of the amended RFA, it was hindered from
making meaningful, informed representations on the licence
applications. It also suggests strongly that Peermont did not suffer
any material prejudice because of that fact.
The incomplete
public-inspection versions of the applications
[36]
Peermont complained that only very
limited portions of the licence applications were made available to
the public. It alleged that
in respect of the Jonoforce application,
the public-inspection version comprised only annexures to the
applications; no portions
of the actual licence applications were
included. In respect of Latiano’s application, Peermont
contended that substantial
portions were omitted or redacted. The
public-inspection version left out not only its executive summary and
its ‘strong
motivation’ for being permitted to operate a
bingo hall in the same town as a casino, but also the amount and
details of
the capital investment in the project, the number of bingo
seats applied for; the split between EBTs and traditional paper
bingo,
and the name of the gaming-machine supplier that would provide
EBTs to the premises.
[37]
This is how the Board went about
this aspect. It relied upon paragraph 4.6 of the amended RFA, which
sets out the minimum information
required for purposes of lodging an
application for a
licence. It divided the
information in two parts. Part 1 relates to information about:
‘
i)
Consolidated and costed Business plan in response to this RFA
ii)
Project models and plans (interior and exterior)
iii)
Land and zoning rights
iv)
Property ownership and/or lease agreements
v)
Shareholding and Corporate structure
vi)
Shareholders agreements
vii)
Business Entity Disclosure Form
viii)
Copies of prescribed notices
ix)
Confirmation of payment of prescribed fees
x)
Bingo Operation Location Plan
xi)
Floor plan as per Rule 13.05
xii)
Financial statements (latest audited)
xiii)
Copies of liquor and other relevant Licenses (proof of application)
xiv)
Original Tax Clearance Certificate
xv)
Valid business registration (CIPRO)
xvi)
Third party agreements (if applicable)
b) Personal History
Disclosures.’
[38]
In part 2, the Board determined
which information from the above list, needed to be available for
public inspection. It excluded
from public inspection, information
relating to
(a)
consolidated
and costed business plan in response to the RFA; (b) project models
and plans; (c) shareholders agreements; (d) confirmation
of payment
of prescribed fees; (e) financial statements; (f)
valid
business registration (CIPRO);
and (g)
personal history disclosures. The Board determined that that
information was confidential, and did not
need to form part of the documents which must otherwise be available
for public inspection.
[39]
The result was that part 2 of
paragraph 4.6 of the amended RFA provided for public view inspection
in respect of:
(a)
Business entity disclosure form;
(b)
Copies of prescribed notices;
(c)
Bingo Operation Location Plan;
(d)
Floor plan as per Rule 13.05;
(e)
Copies of liquor and other relevant
licenses;
(f)
Land and zoning rights;
(g)
Property ownership and/or lease agreements;
(h)
Shareholding and corporate structure;
(i)
Original Tax Clearance Certificate;
(j)
Third party agreements (if applicable).
These are the documents
that lay for public inspection at the offices of the Board during the
period 1 to 31 December 2015. It is
common cause that Peermont did
not avail itself of the opportunity to view the documents.
[40]
In its answer to Peermont’s
complaint, the Board relied upon s 32 of the North West Act, which
requires licence applications
to be made available for inspection and
consideration by interested parties. Section 32(1) requires the Board
to hold any licence
application submitted to it open for public
inspection by interested persons. Section 32(2) obliges the Board to
furnish a copy
of such application to an interested party, on request
and payment of the requisite fee. Section 32(3) creates limited and
specific
exceptions to these general disclosure requirements. It
empowers the Board to determine, either on its own accord or on
application
by an applicant, that any information or document
pertaining to the financial capacity, names of prospective employees
and business
plans of an applicant shall not be left open to the
public inspection.
[41]
The high court dealt summarily with
Peermont’s argument on three bases. First, it concluded that s
32 gives the Board the
discretion to decide what information in the
application should be availed to the public, and it was not for a
party like Peermont
to determine which information should not have
been omitted. Second, the high court stated that Peermont has not
been able to state
why it failed to inspect the information that was
availed, and lastly, that Peermont had failed to state the prejudice
it had suffered
by not having the said information.
[42]
I understand Peermont’s
complaint slightly differently from the high court. Peermont objected
to the manner in which the Board
had decided in paragraph 4.6 of the
amended RFA, to exclude certain information from public inspection.
The gravamen of its complaint
was that the substance had been
stripped out of the public-inspection versions of the applications.
This, it contended, meant that
a mandatory and material condition of
the North West Act was not complied with. According to Peermont, it
would have served little
or no purpose for it to seek to view what it
considered woefully inadequate information.
[43]
To my mind, the main obstacle for
Peermont is the wide and discretionary nature of the Board’s
powers set out in the amended
RFA, where the Board had wide
discretionary powers as to how it would assess applications for bingo
licences. The amended RFA also
contains clear, policy-laden ideals
and objectives. Based on those powers, the Board determined, in terms
of paragraph 4.6 of the
amended RFA, which documents would be
excluded from public inspection.
[44]
As
mentioned already, s 32(3) only permits the Board to exclude
specified information that relates to the financial capacity of
an
applicant, the names of prospective employees or the applicant’s
business plan. Paragraph 4.6 of the amended RFA seems
to go much
further and excluded information beyond that mentioned envisaged in s
32(3). In its judgment, the high court seemed
to endorse the Board’s
view that s 32(3) gave it a broad discretion to withhold information
from public inspection. To that
extent, it was clearly wrong. But, as
mentioned already, the main obstacle in Peermont’s path is
that, absent an attack on
the RFA on the basis of being
ultra
vires
s 32, it stands and must be applied, even were it may (notionally)
ultra
vires.
[3]
Unlawfulness of
awarding the licenses
[45]
Traditionally, Bingo is a game of
chance played with cards. Each player matches numbers, pictures or
symbols printed on the cards,
with the numbers drawn at random by the
game host. The winner is the one who first matches the numbers. Over
the years, the game
has evolved and it is now played in whole or in
part by electronic means. According to Peermont, the defining
characteristic of
bingo is the human element in matching the numbers,
pictures or symbols on their card or device to that called out by the
operator
or announcer, in order to win against other human players.
[46]
Peermont contended that the machines
that the respondents intend using in their bingo halls, which it
calls conventional EBTs, lack
this characteristic because they entail
automatic self-matching, and thus remove the human element from the
game. Thus, they are
illegal to operate within North West because the
game they offer falls outside the definition of ‘bingo’
in the North
West Act. According to Peermont, there was no dispute
that the respondents intended using conventional EBTs, which ‘
have
the look-and- feel as slot machines’, whereas, in terms of both
the
National Gambling Act and
the North West Act,
only
casino licensees can offer gambling slot machines. As mentioned
already, Peermont operates two casinos in the North West –
one
in Klerksdorp and another in Mmabatho.
[47]
According to Peermont, the Board was
obliged, when granting the licences, to satisfy itself that the
licences would be used for
lawful purposes. It could only do so by
considering the nature of the EBTs to be operated and whether or not
they could lawfully
be operated under a bingo licence. Therefore, by
granting the bingo licences without considering the nature of the
EBTs and the
respondents’ intended use, the Board failed to
ensure that those EBTs met the definition in the North West Act. It
thus failed
to apply its mind to relevant considerations and
committed a material error of law and acted unlawfully.
[48]
I first consider whether EBTs offer
the game of bingo as defined in the North West Act, after which I
consider whether the Board
was legally obliged to consider the type
of EBTs when it awarded the licences.
Do EBTs offer the game
of bingo as defined in the North West Act?
[49]
A considerable plank of
Peermont’s argument in this regard was premised on
the decision in
Akani Egoli (Pty) Ltd v
Chairperson of the Gauteng Gambling Board
(Case number 17891/06, 29 January 2008) and the expert opinion of
Professor Barr used in that case. It is therefore necessary to
consider that decision more closely. The question in
Akani
was whether the Chief Executive Officer of the Gauteng Gambling Board
was entitled to approve a particular electronic gaming machine,
Real
Touch Bingo (RTB), as a device that could be used in bingo outlets in
Gauteng. The casino owners who opposed the approval
of those
machines, argued that RTB was nothing more than an ordinary slot
machine, which bore no resemblance to the game of bingo,
and was
therefore not lawful for it to be approved for use in bingo halls.
The court had to determine, on the basis of the Gauteng
Gambling Act
4 of 1995 (the Gauteng Gambling Act), whether the game played on RTB
was really the game of bingo. As the Gauteng
Gambling Act did not
have a definition of the term ‘bingo’, the court held
that the Gauteng legislature had intended
to conform to the
definition of that term in the National Act.
[50]
After considering the definition of
‘bingo’ in the National Act, the court analysed the
manner in which the game was
played on RTB, and had regard to the
technical report of Professor Barr. It found that the player took no
part in the actual game
played on the RTB. He or she did no matching,
either by electronic means or otherwise. In that regard, the court
found that the
RTB did not provide for an interactive game with
player involvement in accordance with the definition of bingo in the
National
Act.
[51]
On these considerations, the court
concluded that the game played on the RTB was not bingo, and that the
RTBs completely departed
from traditional bingo and were intended
deliberately to mimic casino slots. Therefore, the court reasoned, by
approving those
machines for use in licensed bingo premises, the
Gauteng Gambling Board sanctioned unlawful conduct. It accordingly
reviewed and
set aside the decision of the Gauteng Gambling Board to
approve the RTB for use in licensed bingo premises. Peermont relied
heavily
on these findings, and on the conclusions in related
interdict judgments in the high court, in which the same approach was
adopted
in interpreting the definition of ‘bingo’ in the
North West Act.
[52]
In my view,
Akani
is distinguishable, and reliance on it
in the interim interdict judgments was misconceived. The definition
of ‘bingo’
in the National Act differs significantly from
the definition in the North West Act. The National Act provides that:
‘“
bingo”
means a game, including a game played in whole or in part by
electronic means —
(a)
that is played for consideration, using cards or
other devices —
(i) that are divided into
spaces each of which bears a different number, picture or symbol; and
(ii) with numbers,
pictures or symbols arranged randomly such that each card or similar
device contains a unique set of numbers,
pictures or symbols;
(b)
in which an operator or announcer calls or
displays a series of numbers, pictures or symbols in random order and
the players match
each such number, picture or symbol on the card or
device as it is called or displayed; and
(c)
in which the player who is first to match all the
spaces on the card or device, or who matches a specified set of
numbers, pictures
or symbols on the card or device, wins a prize, or
any other substantially similar game declared to be bingo in terms of
section
6(4).’
[53]
Section 1 of the North West Act
defines bingo as:
‘
the
gambling game known as bingo and any similar gambling game which is
played with cards (including electronic screens) on which
appear a
set of numbers or symbols and in the course of which each player
attempts to match for money, property, cheques or anything
of value,
all or a specified set of numbers or symbols on his or her cards to
calls made by the operator and includes any similar
gambling game
operated in whole or in part by electronic means.’
[54]
The difference between the National
Act, and the North West Act, is that the latter has two parts. The
second part is constituted
by the words, ‘and includes any
similar gambling game operated in whole or in part by electronic
means’ at the end
of the definition. Peermont’s
interpretation ignores this part, and caters for one type of the game
contemplated in the first
part of the definition. The requirement of
‘similarity’ envisages a second type of game to the one
mentioned in the
first part of the definition. This second type of
game does not have to have all the attributes of the first type –
only
that it must be ‘similar’ to it.
[55]
The second type of game is clearly
broader than the traditional bingo game played electronically on
electric screens, as this is
already catered for in the first type of
game. Furthermore, by providing that the game can be operated ‘in
whole or in part
by electronic means’ it is clearly
contemplated that ‘bingo’ can be a wholly electronic
game, with the player
not doing anything other than to initiate the
game. The effect of the second part of the definition is therefore
that the legislature
has broadened the definition ‘bingo’
to permit its playing by partially or wholly electronic means. Thus,
the game
offered by EBTs that do not involve player matching, fall
within the second type of game. In light of the legislature’s
clear
intention to broaden the definition of bingo, Peermont’s
insistence that ‘bingo’ should be interpreted
restrictively
in terms of how the game of bingo has traditionally
been defined, is untenable.
[56]
However, even what Peermont defines
as conventional EBTs (without player matching) fall within the
definition of ‘bingo’
in the North West Act, which is
broad and was clearly intended to acknowledge technological
developments in the playing of the
game of bingo. This conclusion is
fortified by the definitions of ‘gambling device’ and
‘gambling machine’
in the North West Act. Gambling device
means ‘any equipment or thing used remotely or directly in
connection with gambling
or and including an electro-mechanical or
electronic device, component or machine or gambling machine’,
while gambling machine
means:
‘
any
mechanical, electrical, video, electronic, electro-mechanical or
other device, contrivance or machine which upon insertion of
a coin,
bank note, electronic credit card, debit card, smart card, token or
similar object, or upon payment of any consideration
is available to
be played or operated and the playing or operation of which, whether
by reason of the skill of the player or operator
or the application
of the element of chance or both, may deliver or entitle the person
playing or operating the machine to receive
cash, property, cheques,
merchandise, credit, electronic credits, debits, tokens, tickets or
anything of value but does not include
an amusement machine.’
EBTs which fit into these
definitions enable operation by electronic means in whole or in part
in playing the game of bingo.
[57]
In addition, Peermont’s
classification of certain equipment as ‘conventional EBTs’
is overbroad. Whether or not
a particular EBT has been programmed in
such a way that it functions in a manner that complies with the
definition of bingo in
the North West Act in every instance, will
depend on an evaluation of the particular machine. This was the case
in
Akani
,
where there was evidence of how the RTB worked, something absent in
the present case. It seems that these electronic terminals
come in
many configurations, shapes and sizes. One model of EBT could look
different to another, run different hardware and software,
and could
offer a different type of electronic bingo, with a different look and
feel. All these are technical and factual issues
which are not
capable of pre-judging without examination, as Peermont would have
it.
[58]
It follows that
Akani
offers no assistance on the question as to whether the EBTs likely to
be used in conjunction with the licences offer bingo as defined
in
the North West Act, and are, therefore, lawful to use in the
province. Equally, the pronouncements in the two related interdict
judgments do not advance Peermont’s case. They were made in the
context of interim interdicts and the courts there could
not make
definitive findings on this issue. To the extent they purported to do
so, their pronouncements should be regarded as obiter.
In
National
Treasury and Others v Opposition to Urban Tolling Alliance (OUTA) and
Others
[2012] ZACC 18
;
2012 (6) SA 223
(CC) para 31, it was held that where an interim interdict was sought
pending the institution and finalisation of a review application
the
court hearing the application for an interim ‘need not
determine the cogency of the review grounds.’ It would not
be
appropriate to usurp the pending function of the review court and
thereby anticipate its function.
Was it unlawful for
the Board to award licences without considering the types of EBTs?
[59]
It
is common cause that when awarding the bingo licences, the Board did
not consider the nature of the applicable EBTs that the
respondents
intended to use on the proposed licensed premises under the authority
of the licences. The Board stated that that process
is distinct from
the licensing one, and would be undertaken at a later stage when the
respondents submit the type of EBTs to be
used in conjunction with
their licences. For this, the Board relied upon regulation 145(1) of
the North West Gambling Regulations
of 2002 (the General
Regulations),
[4]
which reads:
‘
Equipment
to be of approved type and registered
(1)
A licensee shall not keep or expose for
play any equipment which may be used in the operation of a bingo game
other than equipment
which –
(a)
has been supplied by a licensed manufacturer or
supplier;
(b)
is identical in all material respects to equipment
approved by the Board for distribution by the manufacturer or
supplier; and
(c)
in the case of such equipment as the Board may
determine, has on application in the manner and form determined by
the Board, been
separately registered by the Board.’
[60]
Peermont joined issue with the
Board’s reliance upon regulation 145, and made the following
submissions. The regulation does
not require the Board to assess
whether bingo is played on the relevant machines. Its purpose is not
to require the Board to assess
whether the equipment in question
complies with the Act’s definition of ‘bingo’. The
regulation simply requires
these machines to be supplied by licensed
manufacturers or suppliers and to be identical to machines approved
by the Board for
distribution by the manufacturer or supplier. Such
approval of manufacturer or supplier machines relates to the machines
(the equipment)
and not to the licensed activity for which the
machines will be employed. Thus, the processes provided for under
regulation 145
do not assess whether the machines in question offer
the game of bingo. Instead, they are concerned with equipment
standards.
[61]
I do not agree with these
submissions. The regulation expressly enjoins the Board to ensure
that the bingo licensees use only the
equipment which: (a) has been
supplied by a licensed manufacturer or supplier; or (b) is similar to
the equipment approved by the
Board; or (c) has been separately
registered by the Board. It is difficult to see how the Board can
discharge this responsibility
without enquiring, and determining,
whether the equipment fits into the definition of ‘bingo’
in the North West Act.
Viewed in this light, the regulation does
require the Board to assess whether bingo is played on the relevant
equipment. It is
also significant that regulation 145 uses the word
‘licensee’, instead of ‘applicant’. This
fortifies the
conclusion that the equipment-approval process is
envisaged only after a licence has been granted, and not at the time
the grant
of a licence is considered.
[62]
This is also consistent with the
amended RFA, which makes no reference to the type of EBT or bingo to
be offered when licences are
considered. This can only mean that it
was envisaged that the approval of equipment was to be considered at
a later stage. There
is no suggestion that the Board intends to
discard the process of equipment approval, and to simply allow the
licensees to use
unapproved equipment. Regulation 145 must be read
together with s 65 of the North West Act, which enjoins the Board to
ensure that
all gaming machines must be separately approved and
registered by it.
[63]
Accordingly, when an applicant
applies for a bingo licence, he or she is not required in the
application to specify the type of
EBT he or she intends to use, but
to merely specify the number of EBTs or table games. The type of
equipment to be used, and whether
it offers ‘bingo’ as
defined in the North West Act, is not relevant at this stage. It only
becomes relevant when a
licensee seeks the Board’s approval for
a specific equipment he or she intends to use, which application must
be made under
regulation 145(1). In that application, the licensee
must motivate, and satisfy the Board, that the relevant equipment
offers ‘bingo’
as defined in the North West Act. The
Board may or may not be satisfied with the motivation. If not, the
application would be rejected
and the licensee will not be permitted
to use the equipment in question for bingo.
[64]
Viewed in this light, Peermont’s
challenge is premature as regards approvals yet to be made by the
Board for the use of specific
EBTs that any of the respondents might
wish to use. It would have to wait for the Board’s decision to
approve specific equipment
for use. It is not open for Peermont to
anticipate the Board’s decision in this regard with a
pre-emptive strike. What is
more, Peermont has not suffered any
prejudice as a result of the Board’s adoption of the two-stage
process. On this score,
Peermont is in the same position as the
applicant in
Normandien
,
about which this Court appositely said (at para 34):
‘
Normandien
has approached the court before any decision, according to it, has
even been taken, and before it had suffered any prejudice
on account
of the actions complained of. It launched a pre-emptive strike
against Rhino. It may perhaps have been best advised
to “husband
its powder” in anticipation of the battle that may (or may not)
lie ahead.’
[65]
In any event, it is common cause
that most of the EBTs that Peermont objects to, have been approved by
the Board for use in the
North West since at least 2013. The Board
approved the registration of two entities, International Game
Technology-Africa (Pty)
Limited (IGT) and SG Gaming Africa (Pty)
Limited (SG) as manufacturers of the specific EBTs and approved their
equipment for distribution
to licensed bingo operators in the North
West. To the extent Peermont is aggrieved by this decision, it seems
common cause that
Peermont has been aware of this fact, but did
nothing to challenge the Board’s decision to approve and
authorise those EBTs.
It cannot do so in these proceedings, where the
two entities are not even cited.
Failure to consider
impact on Peermont’s casinos
[66]
This complaint is predicated on
Peermont’s assertion that EBTs have the same look-and-feel as
slot machines and provide a
materially similar gaming experience, and
therefore, would adversely affect its revenues and undermine its
continued viability.
In the amended RFA the licence applicants were
required to provide strong motivation for establishing bingo
operations in the same
town as an existing casino. As mentioned
already, Peermont operates casinos in Klerksdorp and Mmabatho, where
Jonoforce and Latiano,
respectively, had been granted bingo licences.
[67]
To motivate its objection, Peermont
relied, among others, on a report prepared by a firm of economists,
RBB Economics (RBB). Peermont
had commissioned that report to analyse
the likely impact of a bingo operation with the relocation of the
Galaxy bingo licence
to Klerksdorp. The report concluded that there
was a significant risk that a substantial portion of the revenues of
Peermont’s
casino would be diverted to the bingo establishment,
and there was a very significant risk that a material portion of its
customers
would no longer gamble at that casino to ‘any
appreciable extent’.
[68]
In order to assist the Board in the
evaluation of the licence applications, the Board commissioned Bohica
Business Consulting CC
(Bohica) to conduct probity reviews of the
various applications and advise it accordingly. During May 2016,
Bohica prepared a comprehensive
report in respect of all the
applications. The report dealt with various objections raised and the
responses thereto, and provided
recommendations to the Board. With
specific regard to Peermont’s objection based on the RBB
report, Bohica found that the
report provided no evidence of likely
consumer trends and customer intentions. Bohica also found that
Peermont’s objection
was anti-competitive. The Bohica report
noted that the Board had given careful consideration to the
socio-economic environment
in determining how many Bingo licences
were to be issued in different districts, including the impact that
additional forms of
gaming may have on communities.
[69]
It is clear that the Board and
Peermont approached this issue from different vantage points. Whereas
Peermont viewed it from a purely
narrow commercial interest, the
Board considered broad objectives set out in the amended RFA, such as
the need to empower historically
disadvantaged businesses,
diversification, the socio-economic environment and the impact that
additional forms of gaming may have
on communities. Thus, from
Peermont’s point of view, it seems that nothing short of the
rejection of the licences would have
satisfied its objection. This
being a review application, the question is whether the Board
performed the function with which it
was entrusted, and not whether
its decision was correct. From a perusal of the minutes of its
meeting of 10 June 2016, it seems
that the Board considered
Peermont’s objection against the Bohica report, and other
factors referred to earlier, and found
it to be without merit.
[70]
It
is trite that when a functionary is entrusted with a discretion, the
weight to be attached to particular factors, or how far
a particular
factor affects the eventual determination of the issue, is a matter
for the functionary to decide. If he or she acts
in good faith (and
reasonably and rationally) a court of law cannot interfere.
[5]
The fact that the Board did not adopt Peermont’s objections
does not mean it did not consider the impact of the bingo operations
on Peermont’s casinos. It did, and balanced this against other
relevant factors, which it was enjoined to consider. There
is,
therefore, similarly no merit in this ground of review.
Conclusion
[71]
In all the circumstances, there is
no merit in any of the three review grounds advanced by Peermont.
They were correctly dismissed
by both the Tribunal and the high
court. The appeal must therefore fail and costs must follow the
result.
[72]
In the result, the appeal is
dismissed with costs, including the costs of two counsel.
T
MAKGOKA
JUDGE
OF APPEAL
Musi AJA (Maya P,
Makgoka, Gorven, Plasket JJA concurring)
[73]
As explained above, the high court
dismissed with costs, the review applications of the appellants,
Galaxy Bingo Moruleng (Pty)
Ltd (previously called Metro Gaming &
Entertainment (Pty) Ltd) (Metro) and Galaxy North West (RF) (Pty) Ltd
(collectively the
Galaxy entities), to review and set aside the
decisions of the North West Gambling Board (the Board), taken on 10
June 2016. The
Board refused their respective applications for a
bingo licence but granted it to the sixth respondent, (Jonoforce
(Pty) Ltd (Jonoforce).
They also unsuccessfully sought to review and
set aside the decision of the North West Review Tribunal (the
Tribunal), which had
also dismissed their applications to review and
set aside the Board’s decisions.
[74]
On
2 October 2015, the Board published a notice in the Provincial
Gazette inviting interested parties to apply for bingo licences
in
the North West Province.
[6]
Two
licences were to be awarded in the Kenneth Kaunda District
Municipality.
[75]
The appellants showed interest and
obtained a copy of the Request for Application (the RFA) from the
Board. Upon receipt thereof,
they noticed discrepancies and omissions
in the RFA. They pointed these out to the Board as a result of which
it issued several
notices to all applicants, addressing some of the
discrepancies and omissions.
[76]
On
20 November 2015, the Galaxy entities submitted separate applications
for the two bingo licences. They were both unsuccessful.
The licences
were awarded to Pioneer Bingo (NW) (Pty) Limited (Pioneer) and
Jonoforce (Pty) Limited. Aggrieved by these decisions,
the Galaxy
entities launched internal review proceedings with the Tribunal.
[7]
Their
applications were dismissed.
[77]
Dissatisfied with the decision of
the Tribunal, the Galaxy entities took the decisions of the Board and
the Tribunal on review in
the high court, which also dismissed their
applications with costs. That order is the subject of this appeal,
with the leave of
this Court. It must be mentioned that in the high
court, the Galaxy entities abandoned the challenge to the decision in
respect
of Pioneer, and only sought to review the awarding of the
licence to Jonoforce.
[78]
The powers and functions of the
Board are set out in s 4 of the North West Act. Section 4(1) reads as
follows:
‘
(1)
The powers and functions of the Board shall be –
(a)
to oversee gambling activities in the Province;
(b)
to advise the Responsible Member or furnish a
report or recommendation to the Responsible Member on any matter
referred to the Board
by the Responsible Member for consideration and
arising from the application of this Act relating to the control of
gambling in
the Province;
(c)
to exercise such powers and perform such functions
and duties as may be assigned to the Board in terms of this Act or
any other
law; and in particular to –
(i) invite applications
for licences in terms of this Act;
(ii) consider and dispose
of applications for licences in such manner and at such time and
place as it may from time to time determine;
(iii) grant, renew,
amend, refuse, suspend or revoke licences under this Act;
(iv) impose conditions in
respect of any licence at any time;
.
. .
(xxviii) consult with any
person or employ consultants regarding any matter relevant to the
performance of its functions on such
terms and conditions as the
Board may determine.’
[79]
The
Board issued a Request for Applications (the RFA) in accordance with
the prescripts of the Act. It is not disputed that the
Board did so
legally. The RFA has not been challenged by the appellants. The North
West Act, the regulations published pursuant
thereto, and the RFA
therefore constitute the framework or system within which
applications for bingo licences had to be submitted,
evaluated and
awarded.
[8]
[80]
In the amended RFA the board set out
the objectives of licensing operations, the principles applicable to
bingo operations, the
criteria for evaluation of bingo licence
applications, and the minimum requirements for purposes of lodging an
application for
a bingo operator licence. All the parties acted
pursuant to the prescripts of the RFA.
[81]
The review was launched in terms of
s 6 of the Promotion of Administrative Justice Act 3 of 2000 (PAJA)
which, inter alia, provides
as follows:
‘
(1)
Any person may institute proceedings in a court or a tribunal for the
judicial review of an administrative action.
(2)
A court or tribunal has the power to judicially review an
administrative action if –
(a)
the administrator who took it –
(i) was not authorised to
do so by the empowering provision;
(ii) acted under a
delegation of power which was not authorised by the empowering
provision; or
(iii) was biased or
reasonably suspected of bias;
(b)
a mandatory and material procedure or condition
prescribed by an empowering provision was not complied with;
(c)
the action was procedurally unfair;
(d)
the action was materially influenced by an error
of law;
(e)
the action was taken –
(i) for a reason not
authorised by the empowering provision;
(ii) for an ulterior
purpose or motive;
(iii) because irrelevant
considerations were taken into account or relevant considerations
were not considered;
(iv) because of the
unauthorised or unwarranted dictates of another person or body;
(v) in bad faith; or
(vi) arbitrarily or
capriciously;
(f)
the action itself –
(i) contravenes a law or
is not authorised by the empowering provision; or
(ii) is not rationally
connected to –
(aa)
the purpose for which it was taken;
(bb)
the purpose of the empowering provision;
(cc)
the information before the administrator; or
(dd)
the reasons given for it by the administrator;
(g)
the action concerned consists of a failure to take
a decision;
(h)
the exercise of the power or the performance of
the function authorised by the empowering provision, in pursuance of
which the administrative
action was purportedly taken, is so
unreasonable that no reasonable person could have so exercised the
power or performed the function;
or
(i)
the action is otherwise unconstitutional or
unlawful.’
[82]
The Galaxy entities raised four
grounds of review. First, they contended that the Board withheld
important parts of Jonoforce’s
application from public
inspection, in a procedurally unfair manner in contravention of s
32(3)
(a)
and
24(5)
(d)
of the North West Act. Second, they alleged that their applications
were in almost every relevant metric, objectively superior,
or
similar to Jonoforce’s application and that the scoring which
resulted in Jonoforce receiving higher points than them,
was
irrational and unreasonable, alternatively arbitrary and capricious.
They also pointed out that the Board miscalculated Metro’s
score, which means that the Board’s decision was influenced by
a mistake of fact. Third, they asserted that the Board’s
reasons do not accord with the transcript and minutes of the Board’s
meeting and therefore, appear contrived. Fourth, they
alleged that
the Board was biased against them. I now consider the grounds of
review.
Jonoforce’s
public inspection documents
[83]
The appellants stated that
Jonoforce’s public inspection version contained only annexures
to its application and that it did
not contain the substance of the
application or an executive summary. The appellants asserted that the
public inspection version
rendered the Jonoforce application
insufficient and that the Board should not have considered it because
it was unlawful and irregular
to do so. They argued that the nature
of the public inspection version of Jonoforce’s application
rendered the Board’s
decision reviewable because:
(a) it was contrary to s
32(3)
(a)
of the North West Act and paragraph 6.3 of the RFA;
(b) it was contrary to
paragraph 5.2.5(b) of the RFA; and
(c) it rendered the
Board’s decision procedurally unfair, as they were not given
reasonable opportunity to make informed and
meaningful
representations on the application.
[84]
Section 32(3)
(a)
of the North West Act states that:
‘
(3)
The Board may determine that –
(a)
any document or information relating to the
financial capacity of any person participating in an application, to
the names of prospective
employees or to the business plans of an
applicant, shall not be open to public inspection, provided such
information can be separated
from the remainder of the application
and is marked confidential.’
[85]
Paragraph 6.3 of the RFA reads as
follows:
‘
Confidentiality
In terms of the
provisions of section 32(3) of the Act, an applicant may in the
application concerned, identify any document or
information included
in the application, which in the opinion of the applicant is
confidential or should for any reason not be
disclosed to the public
and show cause why the Board may determine why such document or
information should not be open to public
inspection.
Applicants are therefore,
required to submit a list containing all information deemed
confidential, as well as the reasons why such
information should not
be disclosed, in terms of clause 3.3 herein.
In terms of the Act, the
Board may, further, determine that any document or information
relating to the financial capacity of any
person participating in an
application, to the names of prospective employees or the business
plans of an applicant, shall not
be open to public inspection,
provided such document or information can be separated from the
remainder of the application and
is marked confidential.’
[86]
In terms of s 32(3) of the North
West Act, an applicant may identify any document or information
included in the application, which
in the applicant’s opinion,
is confidential or should, for any reason, not be disclosed to the
public and show cause why
the Board may determine why such document
or information should not be open to public inspection. All
applicants were required
to submit a list containing all information
deemed confidential, as well as the reasons why such information
should not be disclosed
in terms of s 32(3). In terms of s 32(3)
of the Act, the Board may, further, determine that any document or
information relating
to the financial capacity of any person
participating in the application, the names of prospective employees
or the business plans
of an applicant, shall not be open to public
inspection, provided such document or information can be separated
from the remainder
of the application and is marked confidential.
[87]
The appellants contended that the
Board sealed more than the categories of information than was
permitted by the Act. Additionally,
so went the argument, what was
sealed could not be separated from what remained because what
remained gave almost no useful information
as to the nature of
Jonoforce’s application.
[88]
The Board contended that it decided
which portions of the applications ought to be made available for
public inspection. It asserted
that s 28(1) gives it the power to
decide the manner and form in which an application for a licence
should be made. It pointed
out that it made such determination in
paragraph 4.6 of the RFA. Paragraph 4.6 divides the required
information into two parts.
Part one deals with the detailed
application and part two with the portion that will be made available
for public inspection. The
Board further contended that the
appellants were given the opportunity to object to the information
made available for public inspection
but they did not do so.
[89]
Jonoforce contended that its public
inspection copy contained all the information required in paragraph
4.6 of the RFA. However,
Jonoforce admitted that it did not include
its executive summary in its public inspection version, and that on
this score, it did
not comply with paragraph 5.2.5(b) of the RFA.
[90]
The Tribunal was persuaded that the
Galaxy entities failed to establish that Jonoforce’s
application failed to meet the criteria
set out in the RFA read
together with the applicable provisions of the North West Act.
Although the Galaxy entities pressed this
ground of review in the
high court, that court neither discussed nor analysed it.
[91]
Section 24(5)
(d)
of the North West Act provides that the Board shall not approve an
application for any licence unless the applicant has made full
and
frank disclosure of all matters prescribed or determined by the Board
and the relevant information of the application was made
available
for public scrutiny in terms of the provisions of the North West Act.
In terms of s 32(1) any application, representations,
responses and
further information lodged shall be open for public inspection by
interested persons during the normal office hours
of the Board.
[92]
Paragraph 5.2.5(b) of the RFA
required the content of the public viewing documents to be the same
as in paragraph 5.2.2 of the RFA.
Paragraph 5.2.2 reads as follows:
‘
5.2.2
Executive Summary
The
Executive Summary in the proposal should provide a synopsis of the
key aspects and benefits of the applicant’s proposed
business
operation.
The
Key aspects of the proposed project should be clearly described,
taking into account amongst others the evaluation criteria,
including
the following information where applicable:
(a)
details of the project team;
(b)
related managerial experience;
(c)
summary of business plan;
(d)
financial and funding model or strategy,
including a summary of the sourcing, level and nature of financing
and the ability to meet
financial obligations;
(e)
details of any contract entered into
between the applicant and an agency/site, if any;
(f)
a summary of the estimated financial
returns to the applicant from the operation;
(g)
a summary of the key socio-economic
benefits of the project to citizens of the North West Province;
(h)
a summary of the estimated revenue to the
provincial government in respect of gambling taxes.’
[93]
Paragraph 4.6 of the RFA sets out
the minimum information required for purposes of lodging an
application for a bingo operator licence.
It is common cause that
Jonoforce complied with paragraph 4.6 and submitted all the
information required in terms thereof.
[94]
It is clear from s 24(5) that the
Board must be satisfied that the requirements stated therein were met
before it can approve any
licence. The Board set out the minimum
requirements for purposes of lodging an application for a bingo
operator licence in the
RFA. The Board was satisfied that Jonoforce
complied with the prescripts of the RFA. The Board did not regard the
failure to include
the executive summary in the public inspection
version as material. It was satisfied that the relevant information
in respect of
the application was made available for public scrutiny.
[95]
The Galaxy entities admit that they
did not object to Jonoforce’s application during the public
hearings. They left the public
hearing session after making their
presentation but before Jonoforce had done so. They state that they
did not see the need to
robustly challenge the Jonoforce application
prior to the decision to grant the licence to Jonoforce, as,
according to them, Jonoforce’s
public inspection version was
hopelessly non-compliant and they expected the Board to reject it
outright. They state that had a
proper public inspection copy been
made available they would have been apprised of what Jonoforce’s
application actually
contained and would have made submissions with
regard to its deficiencies.
[96]
I
am of the view that the Galaxy entities had sufficient and reasonable
opportunity to make representations and challenge Jonoforce’s
application. They deliberately decided not to. A party should not be
allowed to eschew a process that is geared at achieving transparency,
accountability and equity only to demand its benefits after an
unfavourable decision is taken. The Galaxy entities made an election
and they must be held to it. In
Equity
Aviation Services (Pty) Ltd v Commission for Conciliation, Mediation
and Arbitration and Others,
[9]
the
principle was stated thus:
‘
The
principle of the right of election is a fundamental one in our law .
. . When exercising an election, the law does not allow
a party to
blow hot and cold. A right of election, once exercised, is
irrevocable particularly when the
volte
face
is
prejudicial or is unfair to another.’
[10]
[97]
The Galaxy entities did not contend
that they were prejudiced by the exclusion of the executive summary
from Jonoforce’s public
inspection version. Their
volte
face
will be unfair towards Jonoforce,
for they had enough opportunity to raise their objections at the
public hearing.
[98]
In
any event, the Board’s failure to textually and legalistically
comply with s 32(2) is not fatal if one has regard to the
purpose of
the section. The test as formulated in
African
Christian Democratic Party v Electoral Commission
[11]
is
whether what the Board did constituted compliance with s 32(2) viewed
in the light of its purpose. The purpose of the section
is to ensure
fairness and transparency in the allocation of Bingo licences by
giving interested parties an opportunity to object
to an application,
whilst protecting the applicant against disclosure of confidential
information. Any person, including the Galaxy
entities, could request
further information about Jonoforce’s application before or
during the public hearings. None of them
availed themselves of the
opportunity to do so. In my view the purpose of the section was
achieved.
[99]
The Galaxy entities contended that
Jonoforce was not candid in its application because it stated that
its directors had ‘no
criminal history or prior convictions’,
whereas two of its directors had previous convictions. They asserted
that the Board
could not have been satisfied that Jonoforce made full
and frank disclosure. I am of the view that Galaxy entities are
clutching
at straws with this assertion. That fact was disclosed in
Jonoforce’s application in the company declaration. The Board
was
therefore aware of this fact, and clearly did not consider it a
hindrance when it made its decision to award Jonoforce the licence.
[100]
I am of the view that the Board
complied with the Act and the RFA. It adopted a fair procedure and
complied with all the terms and
conditions in the RFA. Its decision
was therefore rational and reasonable. This review ground ought to
fail.
Objective superiority
[101]
The appellants contended that their
applications were objectively superior in each critical area
indicated in the RFA. The seven
critical areas and the scores
allocated to each are depicted below.
NO
EVALUATION CONSIDERATION
RATING/SCORE
1
Management
competence
20
2
Viability and financing of the
operation
20
3
Broad Based Black Economic Empowerment
commitments
20
4
Measures to create sustainable employment
opportunities
15
5
Socio-Economic
Development
10
6
Employment Practices and Human Resources
Development
Plans
10
7
Security
Measures
5
TOTAL
SCORE
100
[102]
According to the Galaxy entities,
the points allocated to Jonoforce, given their accepted superiority
were unreasonable and irrational
alternatively arbitrary or
capricious. Jonoforce obtained 546, Metro 445 and Galaxy Bingo 459.
[103]
The Board denied the Galaxy
entities’ assertions and pointed out that it applied its mind
to all the applications and exercised
a discretion as to who should
be awarded a licence. It stated that the Act and the RFA gave it a
very wide discretion to evaluate
the information submitted by an
applicant and that it procured the services of Bohica Business
Consultants CC (Bohica) in order
to assist and advise it on the
evaluation of the applications.
[104]
Jonoforce conceded that the Galaxy
entities’ bid was superior, in certain areas. It attributed
this to the fact that the Galaxy
entities are well established
gambling industry players, with access to financial muscle, human
resources and technical support.
Jonoforce, on the other hand, is a
new entrant in the bingo field and it understandably does not have
access to similar resources.
[105]
The Tribunal found that the
transformation of the gambling industry was a legitimate goal that
should be pursued to broaden access
to opportunities for all,
especially previously disadvantaged people. Additionally, but allied
to this, it found that diversifying
and expanding the existing
gambling sector is a compelling legitimate statutory purpose. On
these considerations, it concluded
that the Board’s decision
was rational.
[106]
The high court found that the
Board’s reasoning for allowing new entrants in the gambling
sector was sensible and could prevent
monopolies. It further found
that the Board possesses the necessary expertise ‘in
determining the award of licences in the
province’. It too,
held that the granting of a licence to Jonoforce was reasonable.
[107]
The Galaxy entities argued that the
high court erred in finding that the Board’s decision was
consonant with the need to allow
new entrants. They submitted that
the high court erred in finding that the Board acted reasonably and
by deferring to the Board.
[108]
The essence of this ground of review
is that the Board did not assess the facts properly. The Galaxy
entities required the high
court to evaluate and compare their
applications with Jonoforce’s. According to them, this exercise
would have shown that
their applications were superior to that of
Jonoforce. The appellants set out, at length, all the facts that make
their applications
objectively superior.
[109]
It
should be remembered that the high court had to adjudicate a review
and not an appeal. In
Pepcor
Retirement Fund and Another v Financial Services Board and
Another,
[12]
this
Court stated:
‘
Recognition
of material mistake of fact as a potential ground of review obviously
has its dangers. It should not be permitted to
be misused in such a
way as to blur, far less eliminate, the fundamental distinction in
our law between two distinct forms of relief:
appeal and review. For
example, where both the power to determine what facts are relevant to
the making of a decision, and the
power to determine whether or not
they exist, has been entrusted to a particular functionary (be it a
person or a body of persons),
it would not be possible to review and
set aside its decision merely because the reviewing court considers
that the functionary
was mistaken either in its assessment of what
facts were relevant, or in concluding that the facts exist. If it
were, there would
be no point in preserving the time-honoured and
socially necessary separate and distinct forms of relief which the
remedies of
appeal and review provide.’
[13]
[110]
A
reviewing court should always guard against usurping the functions
and decision-making powers of administrative agencies.
[14]
In
South
Durban Community Environmental Alliance v MEC for Economic
Development, Tourism and Environmental affairs: KwaZulu-Natal
Provincial Government and Another
,
[15]
this
Court, with reference to mistake of fact, said the following:
‘
I
consider that the present state of the law in this regard, is
correctly set out in the following
dictum
,
in the case of
Airports Company South
Africa v Tswelokgotso Trading Enterprises CC
2019 (1) SA 204
(GJ) para 12…:
“
In
sum, a court may interfere where functionary exercises a competence
to decide facts but in doing so fails to get the facts right
in
rendering a decision, provided the facts are material, were
established, and met a threshold of objective verifiability. That
is
to say, an error as to material facts that are not objectively
contestable is a reviewable error. The exercise of judgement
by the
functionary in considering the facts, such as the assessment of
contested evidence or the weighing of evidence, is not reviewable,
even if the court would have reached a different view on these
matters were it vested with original competence to find the
facts.”’
[16]
[111]
The facts on which the Galaxy
entities rely to show their objective superiority are not
uncontested. With regard to management competence,
Jonoforce points
out that the Galaxy entities do not assert that its management
competence and experience was deficient or rendered
it unqualified to
be awarded a bingo licence. Jonoforce explains that the Galaxy
entities used the same management team at all
its bingo operations.
This team, according to Jonoforce, is not directly involved in the
day-to-day individual bingo sub-operations.
The team also charges 5%
of gross gaming revenue management from each bingo operator.
Jonoforce stated that, although the appellants
have greater access to
funding and resources, its management team consists of successful
entrepreneurs and it is self-funded through
loans from its
non-Previously Disadvantaged Individuals (PDI) shareholders.
[112]
The Galaxy entities also asserted
that the 300m² site secured by Jonoforce is hopelessly
inadequate for bingo operations. Jonoforce
explains that the size of
its site was a deliberate choice to balance a number of competing
priorities, including securing the
best location. The Board accepted
this, and there is nothing reviewable about its decision.
[113]
The Galaxy entities proffered the
same gross gaming revenue projections for two different applications
at two different municipalities.
Bohica analysed all the applications
and found Jonoforce’s to be adequate. Jonoforce also advanced
the Board’s objective
of opening and diversifying the gambling
sector in the North-West Province.
[114]
It is clear that the factual basis
for the alleged objective superiority is heavily contested. Were this
Court to delve into each
and every aspect which the appellants
alleged show their superiority with a view of upsetting the decision
of the Board, the distinction
between appeal and review would be
impermissibly blurred.
[115]
The Galaxy entities also challenged
the Board’s scoring. They argued that the scores of some Board
members were not rationally
connected to the information before the
Board. In this regard, the Galaxy entities singled out one of the
Board members, Mr Kunene,
who gave Jonoforce a perfect score of 100.
[116]
The
Board consists of a group of people with diverse backgrounds and
experiences.
[17]
Their
judgment and allocation of points would inevitably be influenced by
their backgrounds. One factor may weigh heavy for one
but not for the
other. The Galaxy entities failed to mention that Mr Kunene gave
Galaxy North West 98 out of 100. It is clear that
he gave very high
scores relative to the other Board members. The Galaxy entities
contended that the scores should be predictable
and within a
particular range.
[117]
The Tribunal found that the
difference in scoring is indicative of the fact that the Board
members applied their minds to the subject
matter and ‘[t]o
expect similar and/or equivalent scoring from persons of diverse
professional and social backgrounds would
undermine the requirements
for diversity’. Unsurprisingly, the Galaxy entities do not
offer any support for their submission
of predictability. However,
the fact that the Board members allocated different scores or that
their respective scores differ greatly
does not necessarily make the
decision irrational. The scoring of the individual members was not
the sole criterion.
[118]
The Board miscalculated Metro’s
score by reflecting its score as 433 instead of 445. The Galaxy
entities contend that as a
result, the Board’s decision was
influenced by a mistake of fact. The correct score would not have
made a difference with
regard to the decision as Jonoforce’s
score would still be higher than Metro’s score. Although this
was a mistake of
fact, it was not a material mistake as the scores
were not the only criterion used to award licences. The Board’s
decision
was not materially influenced by this mistake.
[119]
Metro also bemoaned the fact that it
received different scores for different applications. In my view,
there is nothing untoward
about this. The different applications were
for different sites (Klerksdorp and Mahikeng) and Metro was competing
with a different
entity (Latiano) at Mahikeng. It is, therefore,
understandable that it was evaluated and scored relative to the other
competitor.
[120]
Therefore, the high court’s
conclusion that the Board’s decision on this score was
reasonable, is unassailable. Likewise,
the high court’s
conclusion that the Board properly considered the review grounds
discussed above is correct.
Reasons
[121]
As stated above, the Board gave the
reasons for its decisions to the Galaxy entities. Most of the reasons
overlap. With regard to
both Galaxy entities, the Board stated that
in evaluating the applications it considered the objectives of the
RFA which sought
to:
(a)
diversify and expand existing gambling activities and provide
additional and alternative forms of leisure and entertainment
to all
areas in the province, in particular, townships and rural
communities; and
(b)
open the sector and create opportunities for direct participation by
local previously disadvantaged individuals and Small Medium
and Micro
size entrepreneurs, in the gambling industry.
[122]
The Board indicated that in granting
the applications to the successful applicants it considered that this
would diversify, open
and create opportunities for direct
participation by local previously disadvantaged individuals.
Furthermore, so the Board stated,
in determining the best
application, it took into consideration all factors that would make
an application exceptional in comparison
to all others; and it could
not find any factors that made the Galaxy entities’ bids
exceptional.
[123]
With regard to Metro, the Board
pointed out that during the evaluation of its applications in respect
of Klerksdorp (Dr Kenneth
Kaunda District Municipality) and Mmabatho
(Ngaka Modiri Molema District Municipality), the Board established
that it stated the
same gross gaming revenue projections for both
applications, whereas the demographics and the economies of scale
were different.
It stated that because the two municipalities are
vastly different and thus require different financial projections for
operating
a bingo hall, Metro had failed to account and justify the
similarity in the financial projections, during the public hearing.
[124]
The Galaxy entities contended that
the reasons proffered by the Board are inconsistent with the
transcript of the Board’s
meeting and the minutes thereof. It
contended that the Board used the scores allocated for each critical
area as the basis for
granting the respective licences. They
submitted that the Board, in considering new entrants, failed to
apply its mind and took
an irrelevant consideration into account. It
argued that the phrase ‘new entrant’ does not appear in
the RFA at all.
[125]
The Tribunal found that the
appellant’s attack of the Board’s policy decisions should
be rejected. It found that the
policy objective of the RFA also seeks
to achieve the ideals of Broad Based Black Economic Empowerment
(B-BBEE) as set out in the
Broad Based Black Economic
Empowerment Act
53 of 2003
.
[126]
The high court, with reference to
clause 1.2 of the RFA, stated that it was important for the Board to
exercise its discretion in
such a way as to ensure that the main
objectives of the RFA were met. It found that it would serve no
purpose to allow monopoly
in the industry and not allow new entrants.
It concluded that the Galaxy entities did not establish sufficient
grounds to have
the Board’s decision reviewed and set aside.
[127]
While it is correct that the RFA
does not make specific reference to ‘new entrants’,
paragraph 1.2 of the RFA states,
inter alia, that the Board realises
that introducing additional bingo licences in the province will,
amongst others, assist in
achieving the objectives of
diversification, expansion and opening the sector to create
opportunities for direct participation
of local previously
disadvantaged individuals and small businesses. Furthermore, it
stated that it endeavoured to achieve and promote
the ideals of
B-BBEE, with the view to increasing the participation of women and
designated groups in the sector.
[128]
In my view, properly construed,
paragraph 1.2 of the RFA sought to allow new entrants into the
gambling business. It is inconceivable
that the objectives of
diversification, expansion and opening the sector can be achieved
without a concerted effort to allow new
players into the industry. It
is also rational and reasonable that the Board would look at the
number of women in the B-BBEE structure
of an applicant, because the
stated objective was to increase the participation of women.
[129]
The Galaxy entities contended that
the second reason for the rejection of their applications is
unsustainable and lawfully unjustifiable.
They argued, first, that it
was not necessary for an application to be exceptional and secondly,
if it was a requirement then their
applications were exceptional.
[130]
Clause 4.7 of the RFA states:
‘
The
Board shall in evaluating the applications for a Bingo Operator
licence not be limited to the above criteria and shall take
into
consideration all factors that may make the bid exceptional in
comparison to all other applications in determining the best
bid.’
[131]
The Board explained that the
arithmetic scoring was not the sole evaluation criterion. It pointed
out that it evaluated the appellants’
applications in
accordance with the permissible criteria set out in the RFA. As
indicated above, one such criterion, on which Metro
was found
wanting, was its gross gaming revenue projections for different
sites.
[132]
The RFA, which stands unchallenged,
clearly stated that the critical areas were additional considerations
for evaluation and all
the applicants were aware of this. The site of
the bingo operations is an obvious important consideration but no
score was allocated
therefor. This is so, according to the Board,
because it was part of the total evaluation process. This cannot be
gainsaid.
[133]
The minutes and the transcript of
the Board meeting of 10 June 2016 both reflect that the issue
relating to Metro’s gross
gaming revenue was highlighted and
seen as an obstacle. The minutes reads:
‘
The
meeting further highlighted that Metro Gaming and Entertainment (Pty)
Ltd [Galaxy Bingo Moruleng] stated the same gross gaming
revenue
projections in respect of Klerksdorp, (Dr. Kenneth Kaunda
Municipality) and Mmabatho (Ngaka Modiri Molema) whereas the
demographics and the economies of scale are distinct.’
The
minutes reflected that:
‘
The
meeting agreed that the successful applicants met the minimum
requirements of the evaluation criteria, and further highlighted
that
the bids by Jonoforce (Pty) Ltd . . . satisfied the objectives of the
RFA and further met the requirement of exceptional bid
as per the RFA
and further agreed that granting applications to Jonoforce (Pty) Ltd
and Pioneer Bingo (NW) (Pty) Ltd will diversify,
open the sector and
create opportunities for direct participation by Local Previously
Disadvantaged Individuals.’
[134]
The Board was clearly not convinced
by the explanation given by Metro. The Board regarded it as an
important factor militating against
granting the licence to Metro.
Although the Board did not mention the scores in its reasons, one can
reasonably accept that the
scores were but one of the considerations
it took into account.
Bias
[135]
The Galaxy entities contended that
the Board was biased or reasonably appeared to be biased against
them. They submitted that the
evidence showed a concerted, though
ham-fisted, attempt to award the licence to Jonoforce at all costs,
regardless of its inferior
application. In support of this
contention, the Galaxy entities alleged that:
(a)
Jonoforce obtained significantly higher scores for metrics where it
was objectively and numerically inferior to them;
(b)
the Board unfairly took issue with their financial projections;
(c)
the report showed procedural bias against them when it failed to
respond to their letters; and
(d)
the Board was biased against them during the public hearings.
[136]
The Tribunal considered the
complaints of the Galaxy entities and concluded that objectively
speaking there is no merit in any of
them. The high court also found
that there were no facts to support the allegations of bias.
[137]
It
is trite that the test for bias is objective and the onus of
establishing it is on the Galaxy entities. The test, as formulated
in
President
of the Republic of South Africa and Others v South African Rugby
Football Union and Others
(
SARFU
),
[18]
is
whether a reasonable, objective and informed person would on the
correct facts reasonably apprehend that the adjudicator did
not bring
an impartial mind to bear on the adjudication of the matter.
[19]
Jonoforce’s
higher scores
[138]
I have dealt with this issue above.
The Galaxy entities did not put forward any evidence or reason why
any individual Board member
or the Board as a collective would be
biased against them. The scores were allocated by individual members
of the Board for each
critical area. The allocation of significantly
higher scores is not necessarily indicative of bias and the Galaxy
entities did
not show why the scores are indicative of bias in this
matter.
Financial projections
[139]
The Galaxy entities alleged that the
Board unreasonably took issue with Metro’s financial
projections while ignoring the fact
that Jonoforce’s
projections showed a business barely turning a profit after five
years. This submission is not entirely
correct. Jonoforce’s
projections show that it would be profitable in the third year. The
fact that the Board took issue with
Metro’s gross gambling
revenue projections is reasonable. The Board was dealing with two
applications by the same entity
for bingo licences at two different
areas. It was only reasonable to ask why the gross gambling revenue
projections for the different
areas were the same.
Failure to respond to
letters
[140]
The Galaxy entities wrote several
letters to the Board seeking clarification on certain aspects in the
RFA. Instead of replying
directly to them, the Board decided to issue
general notices to all applicants clarifying some of the issues
raised by the appellants.
This was a practical way to deal with
concerns raised as a general notice would draw the attention of all
applicants to the concerns
raised and addressed. The Galaxy entities
were seemingly satisfied with the manner in which their queries were
addressed. This
is so because they did not correspond with the Board
further on the issues raised in the letters.
Bias at public
hearings
[141]
This complaint relates to public
hearings held on 23 and 24 May 2016. The purpose of the hearings was
clearly for all the applicants
to present their respective
applications and for the Board members to ask questions, if any. The
Galaxy entities were asked about
the fact that different entities use
the Galaxy Bingo name and branding. The Galaxy entities alleged that
the Board was biased
against them because other applicants were not
asked about the difference between their company name and their
trading name. Mr
Sekgaphane, the former CEO of the Board, explained
that the questions were asked in order to get clarification from the
Galaxy
entities regarding the use of the name Galaxy.
[142]
The CEO stated that in corresponding
with the Galaxy entities or members of their corporate structure the
corporate entities’
names were used interchangeably and this
caused confusion. He also pointed out that the Galaxy entities
submitted multiple applications
for bingo licences and that the Board
endeavoured to get clarification on the identity of the ‘true
faces behind the various
corporate structures’. When the Galaxy
entities answered that other companies also used trade names the
Board pointed out
to them that only one trading name ‘Goldrush’
was used by another applicant, whereas in the case of the Galaxy
entities
different trading names were used.
[143]
I am of the view that this was in
the circumstances a fair question and it does not exhibit any bias
against the Galaxy entities.
Their corporate structure is indeed
complicated. In fact, the Tribunal also misunderstood their intricate
corporate structure,
which is one of the issues taken by them against
the Tribunal’s decision. The questions regarding their
intricate corporate
structure and names used by the different
entities were fair. Mr Mogapi, a Board member, specifically asked the
Galaxy entities’
representative whether the fact that Metro
uses the Galaxy Gaming brand would not cause confusion. The
insistence that the Metro
Gaming Entertainment changed its name to
Galaxy Bingo Moruleng (Pty) Ltd or display Metro Gaming and
Entertainment signage is probably
because of the confusing corporate
structure rather than bias. The name change occurred after a licence
was awarded to Metro and
could not have influenced the decision not
to grant the Galaxy entities licences.
[144]
The Galaxy entities also complained
that the CEO of the Board asked them a question about whether they
agreed that the Board could
impose conditions when granting a
licence. This question was asked because there was, at the time, a
live dispute between the Board
and one of the Galaxy entities about
the question whether the Board could impose conditions when granting
a licence. This question
was also reasonable under the circumstances.
[145]
The Galaxy entities also complained
that the Board asked them a question about the fact that they would
be funded by way of an interest-free
loan. The funding model was one
of the critical areas of the evaluation. Granting a corporate entity
an interest-free loan is indeed
strange and questions to clarify that
is not an indication of bias. It is inconceivable that a biased Board
would grant Metro a
bingo licence during the same sitting. The fact
that it obtained a higher score than Latiano also shows a lack of
bias. A reasonable
person with knowledge of the facts would not
apprehend bias or make such an allegation. The Galaxy entities’
apprehension
of bias was therefore unreasonable and the Tribunal and
the high court correctly dismissed this review ground.
Review against the
Tribunal
[146]
The appellants requested the high
court to review and set aside the decision of the Tribunal on several
bases. They contended that
the Tribunal:
(a)
misconceived its powers;
(b)
applied the incorrect review standards;
(c)
did not properly consider its arguments on bias; applied the wrong
standard in determining whether to grant an order of substitution;
and
(d)
failed to apply its mind.
[147]
The high court found that the issue
relating to the Tribunal misconceiving its powers had ‘nothing
to do with the decision
of the tribunal to uphold the decision of the
board and as such takes the matter nowhere’. It also found that
there was no
reason to review the Tribunal’s decision on the
ground of it applying the incorrect review standard. On the issue of
bias,
it found that the Galaxy entities did not establish any facts
to establish bias. Thus, it dismissed the review application against
the decisions of the Tribunal.
Tribunal misconceived
its powers
[148]
The Tribunal found that s 90(1) of
the North West Act gave it the power of a ‘classical wider
review’. The Galaxy entities
agree with this finding. I will
therefore accept the proposition for present purposes.
[149]
The
Galaxy entities contended that the Tribunal wrongly refused to
interrogate the Board’s decision by holding in various
ways
that it was required to defer to the Board. It submitted that the
Tribunal therefore committed a material error of law. This
submission
is incorrect. The Tribunal did interrogate the Board’s
decision. There are instances in its decision where it
found that the
Board’s decisions on different aspects were rational. It found
that: (a) the RFA was a rational and legitimate
policy of the Board;
(b) the Board’s decision to grant the bingo licences to
Jonoforce and Latiano was rational; and (c)
the Tribunal should not
substitute its opinion for that of the Board as the Board’s
decision was rational. The Tribunal made
these findings after
interrogating the Board’s decisions. Besides, its power to
decide the matter afresh would only arise
if it found during the
review process that any of the Board’s decisions is one that a
reasonable decision-maker could not
reach.
[20]
[150]
It is correct, as the appellants
contended, that the Tribunal relied on pre-constitutional cases when
it adjudicated this matter.
It found an administrative decision
cannot be reviewed unless it is arbitrary, capricious,
mala
fide
or so grossly unreasonable that it
shows that the functionary did not apply its mind. It did not apply
the ‘reasonable decision-maker
standard’ or the standards
set out in s 6 of PAJA. These permit both a reasonableness and
rationality challenge, which can
be taken cumulatively or in the
alternative. The appropriate standard is dependent on the cause of
action or the review ground
utilised to challenge a decision or
process.
[151]
The
Tribunal also used the rationality standard, which is lower than the
reasonableness standard. It subjected both the procedure
and the
decisions of the Board to a rationality standard. In
National
Energy Regulator of South Africa and Another v PG Group (Pty)
Limited
[21]
Khampepe
J, writing for the majority, held:
‘
I
do not believe that we can separate process rationality and
substantive rationality in the way the second judgment purports to.
The relevant question for rationality is whether the means (including
the process of making a decision) are linked to the purpose
or ends.
To my mind, rationality necessarily, whether found in PAJA or
anywhere else, must include some evaluation of process.
If not, then
we are simply asking whether a decision is right or wrong based on
post hoc
reasoning.
It
is a natural and inescapable denouement that the process leading to
the decision “must also be rational in that it must
be
rationally related to the achievement of the purpose for which the
power is conferred”.
There
is no reason why rationality under PAJA should be given a different
(more restrictive) meaning. It follows that rationality
under PAJA
includes an assessment of whether the means (including everything
done in the process of taking the decision) links
to the end.’
[22]
[152]
A proper reading of the Tribunal’s
decision clearly shows that it objectively apprised the process and
the decisions of the
Board. It used the pre-
Bato
Star
test by asking whether the
decision was ‘so grossly unreasonable’. This is a higher
standard. As stated above the correct
question is whether the
decision is one which a reasonable decision-maker could not reach.
The Tribunal’s analysis and findings
are consonant with a
conclusion that the Board’s decisions fall within a range of
reasonable decisions that the Board could
make.
[153]
In
Bato
Star
a reasonable decision is described
thus:
‘
What
will constitute a reasonable decision will depend on the
circumstances of each case, much as what will constitute a fair
procedure
will depend on the circumstances of each case. Factors
relevant to determining whether a decision is reasonable or not will
include
the nature of the decision, the identity and expertise of the
decision-maker, the range of factors relevant to the decision, the
reasons given for the decision, the nature of the competing interests
involved and the impact of the decision on the lives and
well-being
of those affected. Although the review functions of the court now
have a substantive as well as procedural ingredient,
the distinction
between appeals and reviews continues to be significant.’
[23]
[154]
The Tribunal applied the wrong
standard but it subjected the process and decision to a review. Its
decision with regard to the Board’s
decision is one that a
reasonable decision-maker could reach. The Board’s decision is
also within the band of reasonable
decisions that a reasonable
decision-maker could reach.
[155]
The Tribunal cannot be faulted for
finding that it should be slow to interfere with the Board’s
decisions. The Tribunal was
correct in showing deference to the
Board. It is clear from its reasons that it did not rubberstamp
unreasonable decisions and
neither did it timidly accept them. It
said:
‘
Given
the fact and circumstances of [the appellants’] review
applications the review Tribunal should not intervene with the
decisions of the [the Board], more so, as there is no evidence before
the Review Tribunal that the [Board] did not apply its mind
to the
licence applications that were before it.’
[156]
The Tribunal indeed made a mistake
by accepting that the applicant before it was only Metro. It
constantly referred to ‘the
applicant’ instead of ‘the
applicants’, since it had two different entities before it as
applicants. Furthermore,
the Tribunal, in dismissing the review
applications, described each as having been brought by ‘the
applicant’. The
Galaxy entities submitted that these mistakes
are indicative of the Tribunal’s failure to apply its mind. The
Tribunal was
aware that it was dealing with two review applications
brought by Metro and only one brought by Galaxy Bingo North West. It
stated,
in its decision, that ‘the Applicant, Metro Gaming and
Entertainment (Pty) Ltd “Metro” brings [these] review
applications’. It referred to the sites. With regard to the
Galaxy Bingo North West, the Tribunal properly referred to it
and the
fact that it brought a review application with regard to one
application. This indicates that the Tribunal made genuine
mistakes
which are not necessarily indicative of it not applying its mind.
[157]
For all of the above reasons, I am
of the view that the appeal should be dismissed. There is no reason
why the costs should not
follow the result.
[158]
As a result, the appeal is dismissed
with costs, including the costs of two counsel.
C
MUSI
ACTING
JUDGE OF APPEAL
The
Galaxy appeal (in
re
Latiano)
Musi
AJA (Maya P, Makgoka, Gorven, Plasket JJA concurring)
[159]
In this appeal, the appellant,
Galaxy Bingo Moruleng (Pty) Ltd (previously called Metro Gaming &
Entertainment (Pty) Ltd) (Metro))
is aggrieved by the decision of the
Board declining its application for a bingo license and awarding such
license to the sixth
respondent, Latiano 560 (Pty) Ltd t/a Goldrush
Bingo, North West (Latiano) in the Ngaka Modiri Molema District
Municipality. After
it received a formal letter of rejection from the
Board and, later, reasons for the rejection, Metro launched an
unsuccessful internal
review to the North West Gambling Review
Tribunal (the Tribunal), which dismissed its review application. It
approached the court
a quo
seeking to review and set aside the decisions of the board and the
tribunal. The application was dismissed.
[160]
Metro raised three grounds of review
against the Board’s decision. First, that the Board incorrectly
calculated Latiano’s
score and thereby committed a material
mistake of fact as well as a failure to apply its mind properly to
all the relevant considerations.
Second, that the Board’s
reasons do not accord with the transcript and the minutes of the
relevant Board meeting and appear
contrived. Allied to this ground,
that the Board took irrelevant considerations into account and failed
to take into account relevant
considerations and that it acted
unreasonably and irrationally. Third, that the Board was biased
against Metro.
[161]
The bias review ground, which was
similar to the one raised in the Jonoforce appeal, was
comprehensively discussed and definitively
dealt with, and rejected,
in that judgment and therefore, nothing more needs to be said about
it in this judgment. It suffices
to say that the reasons proffered on
this aspect in the Jonoforce appeal apply with equal force to this
appeal. I now turn to consider
the remaining grounds of review,
seriatim.
Board miscalculated
Latiano’s score
[162]
The decision to award the license to
Latiano was taken at the Board’s meeting held on 10 June 2016.
Six Board members allocated
scores. Metro and Latiano’s
consolidated scores were incorrectly calculated as follows: Latiano
471 average 79 (471/6 = 78.5
rounded off to 79). Metro 470 average 78
(470/6 = 78.3 rounded off to 78). It is common cause that the correct
consolidated scores
were: Latiano 467 average 77.83 (467/6 = 77.83)
and Metro 470 average 78.3 (470/6 = 78.3).
[163]
Metro therefore achieved a higher
score. The difference being, on the average score, 0.5. Metro
contended that based on its superior
score the licence ought to have
been awarded to it because the scores were the sole criterion used in
the allocation of licences.
It stated that the minutes and the
transcript of the meeting make it clear that the licenses were
awarded based on the scores.
It pointed out that the minutes
reflected that:
‘
The
meeting after considering the applications resolved that the
following applications should be granted as per the allocated
scores.’
[164]
Metro further sought to rely on the
remarks by Mr Sekgaphane, the Board’s Chief Executive Officer
(the CEO), when he explained
the process to the Board members as
follows:
‘
The
elements [listed on the scorecards] that you find under these
headings are elements that you find in the full reading of the
RFA.
. . .
The last score sheet is
the result, it’s basically now going to tell us according to
District Municipality,
which applicant came top,
second, third
and fourth and in the RFA we said the evaluation of bids and the
granting and the granting of licences will be on
the best
(indistinct) consideration, which basically
means that the highest
scored applicant will be given preference to be licensed
…’
(Appellant’s emphasis.).
[165]
The appellant also relied on the
following extract from the transcript:
‘
CHAIRPERSON:
… Can we then move to the next region, which is Ngaka Modiri
Molema.
Latiano 79
Metro Gaming 78
Board members are you
satisfied with that reflection?
BOARD MEMBERS AGREE.
CHAIRPERSON: Alright,
thank you. Can we then move to the final region?’
[166]
The Tribunal found that the scoring
was used as a computation aid by the Board in the exercise of its
discretion. Additionally,
it found that scoring did not remove and/or
exclude the Board’s discretion, because the Board could still
grant the licence
to an entity that did not achieve the highest
score. The high court mentioned this ground of review but,
unfortunately, did not
discuss or analyze it.
[167]
As
already mentioned, the Board enjoyed wide discretionary powers
conferred in the RFA. Metro has not challenged the lawfulness
of the
RFA. It is this unchallenged policy that the Board utilized in the
exercise of its function to, inter alia, consider and
dispose of
applications for licences in such manner as it may determine.
[24]
The
RFA mentions the critical areas that the Board would use for the
evaluation and it retained the right to look at other factors
during
the evaluation process. It is clear from the RFA that the Board did
not fetter its discretion with the allocation of scores
for the
critical areas.
[168]
For example, paragraph 4.7 of the
RFA, headed ‘Considerations for Evaluations’, the Board
stated that:
‘
a)
In addition to the above criteria the Board will in selecting the
preferred bidder consider any other additional information
and
commitments made by the applicant in support of the application in
determining the best bid.
(b) The Board shall in
evaluating the applications for a Bingo Operator licence not be
limited to the above criteria and shall take
into consideration all
factors that may make the bid exceptional in comparison to all other
applications in determining the best
bids.’
[169]
This
is consonant with the principles stated in
Kemp
and Others v Van Wyk and Others
[25]
that:
‘
[G]enerally
there can be no objection to an official exercising a discretion in
accordance with an existing policy if he or she
is independently
satisfied that the policy is appropriate to the circumstances of the
particular case. What is required is only
that he or she does not
elevate principles or policies into rules that are considered to be
binding with the result that no discretion
is exercised all.’
[26]
[170]
The transcript and the minutes of
the meeting, contrary to what Metro asserts, show that the scoring
was not the only or determinant
factor which the Board was to
consider. When briefing the Board, the CEO emphasized this point. He
explained:
‘
If
you have four applications in Bojanala and you have positioned one,
two, three for lack of a better word, then – and there
are two
licenses in Bojanala, the working of the RFA is such that number 1
and number 2 will then be licensed for Bojanala, because
that would
be influenced by the scoring
and the
principle of the best bid evaluation.
’
(My emphasis.)
[171]
He later gave a full explanation
when addressing a concern raised by Mr Kunene, a Board member. He
said:
‘
So
basically, we wouldn’t even have to sit here, basically we’ll
just have to look at that scoring and then tick off,
but there is an
element that I’m raising and Mr. Kunene, that (indistinct) your
question, and I said when the Board finished
with the evaluation,
there will be the total score according to districts that is going to
be displayed. You have, as the Board
– finished with the
evaluation, there will be the total score according to districts that
is going to be displayed. You have,
as the Board – I’m
answering the last part of your question, are these scores reflective
of what we see? If you see
that there is a candidate there who is
being scored high and according to the evaluation that has been led
by a consultant, that
applicant does not deserve to score that high,
you have to apply your mind to say are we right to proceed with this
(indistinct)
because definitely, if this matter can go to Court, that
question is (inaudible) to say but did you see this applicant was
non-compliant
(indistinct).
Now you have (indistinct)
to manage the scoring . . . That is why that engagement is important.
It’s not for you to deliberate
at length, but you must have
confidence that the scoring reflects generally what we have seen from
the report. So here the scoring
is a guide which you must use, as I
said, to determine 1 and 2, but most importantly this Board must be
satisfied with the decision
that it makes, which will be when you now
to decide to (indistinct), because this [score] is not the right the
score (inaudible)
outcome of the evaluation. A decision must still
say grant, denied, and is going to help the Board in making –
(indistinct)
to your question Mr. Kunene through you Chair.’
[172]
It is clear from the above that a
two-step process was going to be, and was indeed, followed by the
Board. The individual Board
members had to allocate scores in
accordance with the critical areas. Those scores would then be
consolidated, thereafter, the
Board members – as a collective,
would have to evaluate the scores to determine whether those scores
are reflective of all
the evaluation areas stated, inter alia, in
paragraph 4.7 of the RFA, including the critical areas and the
additional considerations.
It is because of this two-stage approach
that the consolidated scores were given to the Board members and they
were asked whether
the scores reflect a fair and transparent
evaluation of the application. It is only after the Board agreed that
the scores reflect
a fair and transparent evaluation, in accordance
with the report of the consultants and the RFA that they moved on to
the next
district.
[173]
Moreover, when the scores reflected
that a licence ought to be granted to Pioneer Bingo, for another
district, the CEO pointed out
that although the scoring showed that
it ought to be successful, the Board still had to consider whether
the misrepresentations
made by its main funder were material. Pioneer
Bingo’s main funder did not disclose his previous convictions.
The Board deliberated
on the issue and found that he apologized for
the misrepresentations and gave an acceptable explanation.
[174]
With regard to Metro and Latiano,
the Board members were under the impression that the latter obtained
a higher score. They were
of the view that the score was a proper
reflection of their evaluation and that it was in line with
consultant’s report.
They were clearly of the view that Latiano
was the better candidate, considering the overall evaluation
criteria, including the
scoring.
[175]
On these considerations, it is
evident that even if the correct scores were reflected, the Board
would still have preferred Latiano
during the second stage of the
evaluation, based on its reasons. It is clear from the minutes of the
meeting that the issue of
Metro’s gross gaming revenue
projections weighed heavily against it. The Board was not satisfied
with its explanation. It
would have failed the second stage of the
evaluation.
[176]
Metro contended that a further
factor that justified the awarding of the license to it was that it
complied with the requirement
of the RFA, which stated that copies of
liquor and other relevant licences or proof of application therefor
was required for purposes
of lodging an application for a bingo
operator licence. Latiano did not comply with this requirement.
According to Metro, this
was a brazen non-compliance with a mandatory
requirement because Latiano indicated that it intends to procure
liquor and associated
items from local suppliers.
[177]
This requirement must be seen in
context. It is only when an applicant had applied for a liquor
licence or indicated that it applied
for a liquor licence that proof
thereof would be required. Metro does not allege that a liquor
licence is an indispensable requirement
to obtain a bingo operator
licence. There is no indication that a bingo licence ought not to be
granted if an applicant does not
intend to sell liquor. In any event,
the Board has the power to grant a licence conditional upon the
licence holder getting a liquor
licence before operating. I am of the
view that this non-compliance is not material.
[178]
In
Allpay
Consolidated Investment Holding (Pty) Ltd and Others v Chief
Executive Officer, South African Social Security Agency and
Others
[27]
the
Constitutional Court said the following:
‘
Assessing
the materiality of compliance with legal requirements in our
administrative law is, fortunately, an exercise unencumbered
by
excessive formality. It was not always so. Formal distinctions were
drawn between “mandatory” or “peremptory”
provisions on the one hand and “directory” ones on the
other, the former needing strict compliance on pain of non-validity,
and the latter only substantial compliance or even non-compliance.
That strict mechanical approach has been discarded. Although
a number
of factors need to be considered in this kind of enquiry, the central
element is to link the question of compliance to
the purpose of the
provision. In this Court O’Regan J succinctly put the question
in
ACDP
v Electoral Commission
as being “whether what the applicant did constituted compliance
with the statutory provisions viewed in the light of their
purpose”.
This is not the same as asking whether compliance with the provisions
will lead to a different result.’
[28]
[179]
Metro contended that the Board’s
reasons do not accord with the transcript and the minutes of the
meeting of 10 June 2016.
I have already indicated that the transcript
indicates that the Board considered other aspects. Metro contended
that the Board
took into account irrelevant considerations when it
considered new entrants and previously disadvantaged women. It also
contended
that the Board misconstrued the enquiry under the RFA and
as a result it was materially influenced by an error of law.
[180]
These contentions were made because
of the following reasons that the Board gave for its decision to
grant the licence to Latiano:
‘
[T]he
Board in evaluating your application . . . took into consideration
the objectives of the Request for Applications (RFA), which
seek to
achieve the following:
(i)
diversification and expansion of existing gambling activities and
provision
of additional and alternative forms of leisure and
entertainment to all areas in the Province, in particular, townships
and rural
communities; and
(ii)
open the sector and create opportunities
for direct participation by Local Previously Disadvantaged
Individuals and Small Medium
and Micro size entrepreneurs, in the
gambling industry.
The Board taking the
above objectives of the RFA into consideration, deemed it necessary
to grant the application for a Bingo License
in Mmabatho to Latiano …
after it was established that [Latiano] satisfied the above
objectives of the RFA in that 60% of
its shareholders are four black
females who are new entrants in the market, and Local Previously
Disadvantaged Individuals.
It is worth mentioning
that the Board in granting the applications to the above-mentioned
applicant, considered that this will diversify,
open the sector and
create opportunities for direct participation by Local Previously
Disadvantaged Individuals.’
[181]
Metro contended that its B-BBEE
commitments, including to PDI women, were superior to Latiano’s.
However, Metro’s PDI’s
for this application were a young
male who owns 25% shares in Metro and a female who owns 35% shares.
The female already had shares
in another business that was allocated
a bingo licence in Brits. Metro alleged that Latiano’s award
does not support broad-based
empowerment because it only allocated
shares to four black women. It also disputed the women are new
entrants. Finally, it contended
that the award to Latiano did not
further diversification in the market and therefore, was not
rationally connected to the reasons
given.
[182]
The high court and the Tribunal
found that the reasons given by the Board were rational and
reasonable. The Tribunal found that
the fact that Latiano had four
females owning 60% shares who were new entrants and local PDIs made
Latiano’s application
exceptional. It further found that the
Board applied its mind when considering the B-BBEE credentials of
both applicants.
[183]
The high court found that the
supposed superiority relied on by Metro was only because of the fact
that it already has licences
in the North-West and in other
provinces. It reasoned that Metro’s argument ‘on its own
completely defeats the intention
of having new entrants in the
gambling industry’.
[184]
The fact that the RFA does not
contain the phrase ‘new entrants’ does not mean that the
Board was barred from considering
such entrants into the gambling
industry as part of its evaluation. The RFA makes plain that the
Board aimed to diversify and expand
existing gambling activities and
it wished to open the sector to create opportunities for direct
participation of local PDIs and
small medium and micro-size and
entrepreneurs, in the gambling industry. The RFA further states that
the Board considers B-BBEE
in the bingo market as vital to any
application. Applicants were requested to clearly and precisely
articulate in the application
‘the promotion of economic
transformation in order to contribute to meaningful participation of
local black people in the
provincial economy’. The Board could
achieve these objectives by, inter alia, looking at new PDI entrants
into the gambling
market.
[185]
It is clear that the Board could
only achieve those objectives by scrutinizing applications to
determine whether they met those
objectives. Metro’s argument
that because a score was already allocated for B-BBEE it meant that
the Board could not consider
that issue outside of the scores
allocated, is wrong. Since this was a vital issue to consider in the
evaluation, it was not unreasonable
for the Board to look closely at
the B-BBEE structure and persons who participate as previously
disadvantaged individuals. In any
event, as already mentioned, the
Board was not satisfied with Metro’s gross gaming revenue
projections.
[186]
The decision to give more weight to
the four female PDI entrants is rationally connected to the
objectives set out in the RFA. The
means employed justifies the end.
It is also a decision which a reasonable decision-maker would reach,
considering the objectives
stated in the RFA. In my opinion the
appeal is without merit.
[187]
As a result, the appeal is dismissed
with costs, including the costs of two counsel.
C
MUSI
ACTING
JUDGE OF APPEAL
Appearances:
In
the
Peermont
appeal
For
appellant
F Snyckers SC (with him I Goodman)
Instructed
by:
Webber Wentzel, Sandton
Symington
de Kok Attorneys,
Bloemfontein.
For
third and fourth respondents:
M P van der Merwe SC (with him K M Mahlase)
Instructed
by:
Bokwa Inc., Pretoria
Bokwa
Inc., Bloemfontein.
For fifth and eighth
respondents: H Maenetje SC
(with him S Pudifin-
Jones)
Instructed
by:
Ian Levitt Attorneys, Sandton
Pieter
Skein Attorneys, Bloemfontein.
For
sixth respondent:
R G Buchanan SC (with him O H
Ronaasen)
Instructed
by:
Le Roux Inc. Attorneys, Mahikeng
Honey
Attorneys, Bloemfontein.
For
seventh respondent:
B Roux SC (with him M Smit)
Instructed
by:
Cliffe Dekker Hofmeyr Inc, Sandton
Noordmans
Attorneys, Bloemfontein.
For
ninth respondent:
P Farlam SC (with him P Olivier)
Instructed
by:
Edward Nathan Sonnenbergs, Sandton
Lovius
Block Inc, Bloemfontein.
In
the
Jonoforce
appeal
For
appellants
P Farlam SC (with him P Olivier)
Instructed
by:
Edward Nathan Sonnenbergs Inc, Sandton
Lovius
Block Inc, Bloemfontein.
For
first and second respondents:
M
P van der Merwe SC (with him M Mathaphuna)
Instructed
by:
Bokwa
Inc., Pretoria
Bokwa
Inc., Bloemfontein.
For
sixth respondent:
H Maenetje SC (with him S Pudifin-Jones)
Instructed
by:
Ian Levitt Attorneys, Sandton
Pieter
Skein Attorneys, Bloemfontein.
In
the
Latiano
appeal
For
appellants
P Farlam SC (with him P Olivier)
Instructed
by:
Edward Nathan Sonnenbergs Inc, Sandton
Lovius
Block Inc, Bloemfontein.
For
first and second respondents:
MP
van der Merwe SC (with him M Mathaphuna)
Instructed
by:
Bokwa Inc., Pretoria
Bokwa
Inc., Bloemfontein.
For
sixth
respondent:
B Roux SC (with him M Smit)
Instructed
by:
Cliffe
Dekker Hofmeyr Inc., Sandton
Noordmans
Attorneys, Bloemfontein.
[1]
Oudekraal
Estates (Pty) Ltd v City of Cape Town
and
Others
[2004]
3 All SA 1
(SCA);
2004 (6) SA 222
(SCA) para 26;
Member
of the Executive Council for Health, Eastern Cape and Another v
Kirland Investments (Pty) Ltd t/a Eye and Lazer Institute
[2014] ZACC 6
;
2014 (3) SA 481
(CC);
2014 (5) BCLR 547
(CC) para
106.
[2]
Section 1
of the
Promotion of Administrative Justice Act 3 of 2000
.
[3]
See
Merafong
City Local Municipality v AngloGold Ashanti Limited
[2016] ZACC 35
;
2017 (2) SA 211
(CC);
2017 (2) BCLR 182
(CC) para
41.
[4]
North
West Gambling Regulations, GN 353 of 2002, PG 5823, 5 November 2002.
[5]
MEC
for Environmental Affairs and Development Planning v Clairison’s
CC
[2013] ZASCA 82
;
[2013] 3 All SA 491
(SCA);
2013 (6) SA 235
(SCA)
paras 18 and 23.
[6]
The
invitation was published in terms of s 24 read with s 28 and s 52 of
the North West Gambling Act 2 of 2001 (the Act). Section
24 reads:
‘
(1)
The licences under this Act shall be –
(a)
Casino licences
(b)
Bingo licences
.
. .
(2)
No person shall make an application for a licence, and no such
application shall be entertained, unless the application is
lodged
pursuant to and in accordance with a notice inviting applications
which has been published by the Board in the
Provincial Gazette
,
and which notice may state: -
(a)
the type and number of licences to be issued and
any conditions that may apply,
(b)
the area to which the licence will relate,
(c)
any requirements that may be necessary or
desirable, and
(d)
the evaluation criteria to be applied.
(3)
All applications for licences shall be considered and disposed of
according to the procedures determined by the Board.
(4)
The Board may conduct or cause to be conducted any hearing,
investigation or enquiry in relation to any application submitted
under this Act.
(5)
The Board shall not approve an application for any licence unless it
is satisfied that –
(a)
the funding of the business for which a licence
is required is provided by a reputable person, body or institution,
(b)
the premises in question are or will on
completion be suitable for the purpose for which they will be used
under the licence,
(c)
the development is not undesirable within the
specific geographic environment, with reference to social,
religious, educational,
cultural, economical, environmental and
land-use aspects,
(d)
the applicant has made full and frank disclosure
of all matters prescribed or determined by the Board and the
relevant information
in respect of the application was made
available for public scrutiny in terms of the provisions of this
Act,
(e)
the grant of the licence is in the public
interest,
(f)
the applicant qualifies in terms of section 25
and is not disqualified in terms of section 26.
(6)
After consideration of an application the Board may grant or refuse
or postpone the consideration of an application subject
to any terms
and conditions it may see fit.’
Section
28 provides:
‘
(1)
Any application for the grant or renewal of a licence shall –
(a)
be lodged in the manner and form determined by
the Board,
(b)
be accompanied by the documents and information
determined by the Board and by the prescribed application fee or
annual fee as
the case may be, which shall not be refundable, and
(c)
be invalid in the event of
non-compliance with the foregoing in any respect.
(2)
The applicant shall be liable for and pay the Board any reasonable
costs incurred in connection with the publication and transmission
of any notice contemplated in section 29(1).’
Section
52 reads:
‘
(1)
No person shall maintain premises where the game of bingo is played,
without a casino licence or a bingo licence, whether
or not any such
game is linked as contemplated in subsection (2).
(2)
No person shall, by any electronic or similar method of linking,
link licensed premises to any other premises so as to provide
for
the game of bingo to be played at such other premises without a
bingo licence in respect of such premises.’
[7]
The
tribunal has power to review a decision or proceedings of the Board.
Section 90 of the Act reads as follows:
‘
(1)
Any person aggrieved by the decision or proceedings of the Board may
by way of review proceedings to be prescribed, submit
him or herself
before a review tribunal in the manner prescribed by the Board in
concurrence with the Responsible Member.
(2)
The aggrieved person shall as soon as is reasonably possible and not
later than thirty days after the Board has given its
decision,
inform the Board in writing of his or her intention to institute
review proceedings as contemplated in subsection (1).
(3)
The review tribunal referred to in subsection (1) shall be consist
of three members appointed by the Responsible Member as
follows:
(a)
an advocate or retired judge who shall for the
purposes of the review proceedings in terms of this section be
appointed as the
presiding officer,
(b)
one member designated by the National Gambling
Board from the staff of the said Board, and
(c)
one member appointed on the basis of having
either proven business acumen, or who is otherwise suitable for
appointment as a member
of the tribunal.
(4)
The procedure to be followed in connection with the hearing of the
review lodged in terms of this section, shall be as prescribed.
(5)
The aggrieved person may in person or through a legal representative
appear before the review tribunal.
(6)
The tribunal hearing the review under this section may:
(a)
confirm or set aside the decision or proceedings
of the Board, or
(b)
remit the matter to the Board with an order to
take a decision in accordance with the correct procedure, or
(d)
such a decision as in its opinion ought to have
been given by the Board and direct the Board to do everything
necessary to give
effect to that decision.
(7)
Members of the tribunal who are not in the full-time employment of
the State, shall be paid such remuneration and allowances
as the
Responsible Member may from time to time determine with the
concurrence of the Member of the Executive Council responsible
for
Finance.’
[8]
Allpay
Consolidated Investment Holdings (Pty) Ltd Others v Chief Executive
Officer of the South African Social Security Agency
[2013]
ZACC 42
;
2014 (1) SA 604
(CC);
2014 (1) BCLR 1
(CC) para 38.
[9]
Equity
Aviation Services (Pty) Ltd v Commission for Conciliation, Mediation
and Arbitration and Others
[2008]
ZACC 16
;
2009 (1) SA 390
(CC);
[2008] 12 BLLR 1129
(CC); (2008) 29
ILJ 2507 (CC); 2009 (2) BCLR 111 (CC).
[10]
Fn
9 above para 54.
[11]
African
Christian Democratic Party v The Electoral Commission and Others
[2006] ZACC 1
;
2006 (3) SA 305
(CC);
2006 (5) BCLR 579
(CC) at para
25.
[12]
Pepcor
Retirement Fund and Another v Financial Services Board and Another
2003
(6) SA 38 (SCA); [2003] 3 All SA 21 (SCA).
[13]
Ibid
para 48.
[14]
Bato
Star Fishing (Pty) Ltd v Minister of Environmental Affairs and
Tourism and Others
[2004] ZACC 15
;
2004
(4) SA 490
(CC);
2004 (7) BCLR 687
(CC) para 45.
[15]
South
Durban Community Environmental Alliance v MEC for Economic
Development, Tourism and Environmental Affairs: KwaZulu-Natal
Provincial Government and Another
[2020] ZASCA 39
;
[2020] 2 All SA 713
(SCA);
2020 (4) SA 453
(SCA);
2020 (7) BCLR 789
(SCA).
[16]
Ibid
para
23.
[17]
In
terms of section 5 of the Act the Board shall consist of nine
members whom –
‘
(a)
one member shall be qualified to be
admitted to practice as a legal practitioner and after having so
qualified, practiced as a
legal practitioner or performed services
related to the application or administration of the law,
(b)
one member shall be an accountant or auditor
registered in terms of the Public Accountants’ and Auditors’
Act, 1991
(Act No. 80 of 1991), with experience in public practice
as defined in section 1 of that Act,
(c)
one member shall be appointed by virtue of his or
her knowledge and experience in the field of welfare or
socio-economic development,
(d)
one member shall be appointed by virtue of his or
her knowledge and active involvement in the tourism industry,
(e)
one member shall be designated by the Member of
the Executive Council responsible for Economic Development and
Tourism,
(f)
one member shall be designated by the Member of
the Executive Council responsible for Safety and Liaison;
(g)
one member shall be designated by the Member of
the Executive Council responsible for Finance and Provincial
Treasury,
(h)
two members shall be appointed on the basis of
having either proven business acumen, a knowledge of the gambling
industry, or
who are otherwise suitable for appointment as members
of the Board.
(2)
In addition, the Chief Executive Officer of the Board shall
ex
officio
be a member of the Board but shall not be entitled to
vote.
(3)
A member of the Board other than a member referred to in paragraphs
(e)
,
(f)
or
(g)
of subsection (1) shall not be
appointed until the Responsible Member has invited interested
parties by notice in the
Provincial Gazette
and an
advertisement in the media to nominate within 21 days of the
publication of such notice candidates for consideration.
.
. .
(11)
A member of the Board shall before assuming office, make and
subscribe an oath or solemn affirmation in the form determined
by
the Responsible Member.’
[18]
President
of the Republic of South Africa and Others v South African Rugby
Football Union and Others
–
Judgment
on recusal application 1999 (4) SA 147 (CC); 1999 (7) BCLR 725 (CC).
[19]
Fn
18 above para 48.
[20]
Bato
Star Fishing (Pty) Ltd v Minister of Environmental Affairs and
Others
[2004] ZACC 15
;
2004
(4) SA 490
(CC);
2004 (7) BCLR 687
(CC) para 44.
[21]
National
Energy Regulator of South Africa and Another v PG Group (Pty)
Limited
and
Others
[2019]
ZACC 28; 2019 (10) BCLR 1185 (CC); 2020 (1) SA 450 (CC).
[22]
Fn
21 above para 48-50.
[23]
Fn
21 above para 45.
[24]
See
s 4
(c)
(ii)
of the North West Act.
[25]
Kemp
and Others v Van Wyk and Others
[2008]
1 All SA 17 (SCA).
[26]
Ibid
para 1.
[27]
Allpay
Consolidated Investment Holdings (Pty) Ltd and Others v Chief
Executive Officer of the South African Social Security Agency
(Corruption Watch and Centre for Child Law as Amici Curiae)
[2013] ZACC 42
;
2014 (1) SA 604
(CC);
2014 (1) BCLR 1
(CC).
[28]
Fn
28 above para 30.
sino noindex
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