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IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

CASE NUMBER:  76077/13

       DATE:   28 August 2015

JUS INVESTMENTS (PTY) LTD                                                                                  Applicant

                                                                                                    V

THE GAUTENG PROVINCIAL LIQUOR BOARD                                                    Respondent

JUDGMENT

MABUSE J:

[1] This matter came before me as a review in terms of s. 6(2) of the Promotion of Justice Act 3 of 2000 (PAJA).  The purpose of the application is to review the decision of the respondent in which the respondent refused to grant the applicant’s liquor licence application; to have that decision set aside; to substitute the said decision with an order in terms of which the applicant is granted the licence it applied for, in the process, directing the respondent to issue the licence; in the alternative referring the matter back to the respondent with an order in which the respondent is directed to grant the licence applied for, and further in the alternative, referring the matter back to the respondent and directing it to consider within 60 days of the order, the application afresh within the ambit of the record before it; the Court papers and the reasons of the Court for reviewing and setting aside its decision.  This application is opposed by the respondent.

[2] The applicant in this matter is a company, duly registered in terms of the company laws of this country.  I will assume, as this has not been stated in the application, that its registered office is located at 55 corner Wolmarans and Twist Streets, Joubert Park, Johannesburg.  The application is founded on the affidavit on one Portia Mpatani, an adult business woman of the same address as the applicant who is a shareholder of the applicant.

[3] The respondent, the Gauteng Liquor Board, is constituted as a legal persona by the provisions of the Gauteng Provincial Liquor Act 2 of 2000 (“The Liquor Act”), in particular section 2 thereof.  Its offices may be found on the third of the building at 124 Main Street in Johannesburg.  As indicated earlier, the respondent opposes this application and for that purposes uses the answering affidavit of one Funeka Njobe (“Njobe”), its chief director who is responsible for legal services in the Department of Economic Development of the Gauteng Provincial Government.  The contents of her affidavit enjoy the support of one Luyanda Kopman, an attorney attached to the State Attorney’s Office, Pretoria.

[4] Section 23 of the Liquor Act deals with applications for new liquor licences.  It prescribes all the documentation that must accompany such an application, which itself must be made on a prescribed form.  Now in compliance with the provisions of the said s. 23, on 3 May 2013, the applicant lodged its application for the issue to it of a liquor store licence with the respondent.  That that was done on 3 May 2013 is not in dispute nor is it an issue as it is evidenced by the official stamp of the respondent on a copy of the relevant application attached to the founding affidavit.  It is contended by the applicant that the relevant application complied, in all material respects, with the requirements of the said s. 23.

[5] S. 25(1) of the said Liquor Act provides that:

“Any person may lodge an objection to the granting of a licence in terms of this Act, in the prescribed manner, with the local committee and the applicant within twenty-one (21) days from date of publication of a notice referred to in section 24.”

S. 25(2) prescribed what such an objection should state.  It states that:

“The objection shall fully state the reasons thereof and contain the full names of the person or institution objecting, together with the full address and contact details and be accompanied by an supporting documentation.”

The notice referred to in s. 24 supra, is a publication of a notice of intention to apply for a liquor licence in the newspapers circulating in the area where the premises are situated and also in the Provincial Gazette.  It is contended furthermore by the applicant that no such objections were lodged against this application.

[6] One Witness Khanye, a Liquor Trade Inspector in Gauteng, conducted an inspection of the premises where the applicant intends conducting the business, interviewed several people and institutions about the establishment of a liquor business, especially of the type applied for by the applicant in their area and having done so, compiled a comprehensive report for the second respondent.

[7] The respondent then considered the applicant’s application.  After applying its mind to the application or considering it, it refused the application and notified the applicant in writing accordingly.  The said notification reads as follows:

“1.     The Gauteng Liquor Board has considered your application for a license in terms of Section 23 of the Gauteng Liquor Act, No. 2 of 2003, in respect of Athony’s Bottle Store, at the Gauteng Liquor Board meeting held on 07 May 2013.

2.            Your application for a Liquor Store License has been refused on inter alia the following basis of:

2.1                   Not in the Public interest; and

2.2                   Too many Liquor outlets.

3.      Kindly note that in terms of Section 23(3):  “Where an application for a license has been refused by the Board, no new application may be made in respect of the same premises within a period of one (1) year from the date of refusal, except by special leave granted at the discretion of the Board.”

[8] Quite clearly two reasons were furnished by the second respondent why it refused the application.  Those reasons are firstly, that it is not in the public interest to grant the application; secondly, that there are too many liquor outlets in the area.  Now the applicant is disgruntled by the two reasons on the basis of which its application was refused.  It contends that those two reasons are without substance and furthermore that the decision of the respondent to refuse the application, especially on those two grounds, is in terms of s. 6(2) of 2(d) of PAJA, reviewable by reason of the fact that the respondent erred in law in finding “proliferation” and “that the public will not be advantaged” if the application is granted.

[9] The applicant raised an argument in the founding affidavit, where it stated that nowhere in the Liquor Act is there any reference to “proliferation”.  I think the applicant has misquoted the respondent’s letter.  Nowhere in the said letter did the second respondent use the word “proliferation”.  All that the letter stated was “too many outlets”.  The letter did not use the “advantage”.  I would accept that this was the interpretation that the applicant attached to the first reason for refusal of the application.  During his argument, Mr. Welgemoed, on a number of occasions, used the word “proliferation” and “advantage” as if they were used in the respondent’s letter.  The same attitude permeated his heads of argument.

[10] The applicant contends furthermore that it believe that, in considering the application, the respondent took into account immaterial considerations.  This contention is based seemingly on the fact that the respondent took into account the number of outlets in the same area without any evidence that there was any overtrading.

[11] In his heads of argument, Mr Mathaphuna, counsel for the respondent, stated that on a proper application and interpretation of s. 30(3) of the Liquor Act, it is implicit that the respondent was not obliged to grant a licence for premises falling within 500 metres.  This statement is actually based on the provisions of s. 30(3) of the Liquor Act which states that:

“The Board shall grant an application in the case of premises not situated within a radius of five hundred (500) metres in the vicinity of a place of worship, educational institution, similar licenced premises, public transport facility, or such further distance as the Board may determine or as may be prescribed from time to time.”

According to Mr, Mathaphuna, the correct interpretation of the said s. 30(3) entails that a further licence cannot be granted in close proximity to another existing liquor licence, unless there is good reason to do so, for example, where the existing store does not give proper service or does not have proper stock or overcharges patrons.

[12] For the reasons that I will refer to hereunder, there seems to be no merit in the argument raised by Mr. Mathaphuna.  In the first place the respondent did not state the distance in between the liquor outlets as the reason for refusing the application.  The respondent simply stated that “too many outlets”.  S. 30(3) therefore plays no role in this matter.  The application was not refused on account of the reason that the place where the applicant intends conducting its business is within 500 metres of a place of worship, education and institution, similar licence premises, public transport.    

[13] The reason for the refusal that there were “too many outlets” was clearly based on the report by Witness Khanye, especially paragraph 14 thereof that deals with “OTHER LIQUOR OUTLETS WITHIN 500 METRE RADIUS OF THE PREMISES.”  In the said report, the said Witness Khanye listed 21 various liquor outlets.  Some of those listed are hotels, others restaurants, taverns and supermarkets.  Section 28 of the Liquor Act classifies liquor licences into two:

1.           for consumption of liquor on the licensed premises concerned; and

2.           the other being for consumption off the licensed premises concerned.

These two classifications are dealt with in section 28(1)(a) and (b) of the said section.  In respect of the consumption of liquor on the licence premises the licence holder is permitted to sell liquor to patrons on the premises but that liquor has to be consumed on the premises.  No person is allowed to leave the premises with liquor that he bought from such licensed premises.

[14] All the premises are set out in s. 28(1)(a) of the Liquor Act and states as follows:

“(1)         The following licences may be granted for the sale and supply of liquor –

(a)       for consumption on the licensed premises concerned –

(i)         hotel liquor licences;

(ii)        restaurant liquor licences;

(iii)       theatre liquor licences;

(iv)       club liquor licences;

(v)        night club liquor licences;

(vi)       gaming premises liquor licences;

(vii)      sports ground liquor licences;

(viii)     pub liquor licences;

(ix)       dance hall liquor licences;

(x)        tavern liquor licences;

(xi)       pool club liquor licences;

(xii)      sorghum beer licences (on consumption); and

(xiii)     catering or occasional permits.”

[15] Now s. 28(1)(b) deals with licences in respect of consumption of the licence premises concerned.  It states as follows:

“(b)         for consumption off the licensed premises concerned –

(i)         wholesale liquor licences;

(ii)        liquor store licences;

(iii)       grocers’ wine licences; and

(iv)       micro-manufacturer liquor licence; and

(v)        sorghum beer licences (off consumption).”

When one looks at the report by Khanye, it is clear that most of the outlets listed in paragraph 14 of his report are licences that fall within s. 28(1)(a).  Those licensees are allowed to sell liquor to the patrons but that liquor must be consumed on the premises.  Only a few of those outlets listed in his report are licensed to sell liquor for consumption off the licensed premises.  Such licensed premises listed in his report can be counted in one hand.

[16] It is common cause that the applicant had applied for a liquor store licence.  The respondent should have considered the application from that point of view.  It should have established not the number of outlets and decided that there were “too many outlets” but should instead have tried to identify the number of outlets that would render the same service as the applicant.  If it had performed this exercise properly it would have discovered that there were very few premises licensed in terms of section 28(1)(b) in Khanye’s report. 

[17] It goes without saying that once the respondent had sifted all the outlets and identified that very few of them were licensed to sell liquor for consumption off the premises, it would have found that it was in the public interest to have such a liquor outlet.

[18] The argument raised by Mr. Welgemoed that there were no objections against the application does not take this matter any further.  This is so because the refusal was not based on the fact that there were objections.  “Objections” in any case in this sense refer to objections as envisaged by section 25 of the Liquor Act.

[19] I am satisfied that in considering the application, the respondent did not properly apply its mind to the application.  It is the prerogative of the respondent, and not the duty of this Court, to consider the applications for liquor licences.  In my view this application should be referred back to the respondent and the respondent should be ordered to relook at it taking into account the facts set out in paragraph 16 supra.  Accordingly the following order is made:

1.      The decision of the respondent in which it refused the applicant’s application for the issue of a liquor store license is hereby reviewed and set aside.

2.      The applicant’s application is hereby referred back to the respondent and the respondent is hereby ordered to consider it afresh within sixty (60) calendar days, taking into account the ambit of the record before it, the Court papers and the reasons set out in paragraph 16 of its judgment for reviewing and setting aside the decision.

3.      The respondent is hereby ordered to pay the costs of this application.

                                                                                                            _____________________

                                                                                                            P.M. MABUSE

                                                                        JUDGE OF THE HIGH COURT

Appearances:

 

Counsel for the Applicant:                                                   Adv. CJ Welgemoed

Instructed by:                                                                        Marius Blom Inc.                              

Counsel for the respondent:                                               Adv. ME Mathaphuna

Instructed by:                                                                        State Attorney, Pretoria

Date Heard:                                                                          25 August 2015

Date of Judgment:                                                                28 August 2015       

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