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IN THE NORTH WEST HIGH COURT, MAFIKENG

CASE NO:  M 176/17

Not reportable

Not of interest to other judges

In the matter between:

CENTRAL GAMING MANAGEMENT (PTY) LTD                         1^st Applicant

MMEB MASJIENE (PTY) LTD                                                      2^nd Applicant

and

NORTH WEST GAMBLING BOARD                                        1^st Respondent

ELIOCUBE (PTY) LTD                                                             2^nd Respondent

 

DATE OF HEARING : 29 AUGUST 2017

REASONS FOR JUDGMENT : 12 OCTOBER 2017

COUNSEL FOR THE APPLICANTS : ADV.JAGGA

COUNSEL FOR 1^ST RESPONDENT : ADV. MOKOTI

COUNSEL FOR 2^ND RESPONDENT : ADV. EHRICH

JUDGMENT

HENDRICKS J

 

Introduction

[1] On the 26^th April 2017 the applicants launched an urgent application praying for an interim interdict in the following terms:

“2. Interdicting the –

a. 1^st Respondent from authorizing the 2^nd Respondent to conduct and/or allow the operation of Electronic Bingo Terminals (“EBT”) at 30 Market Street, Vryburg;

b. 2^nd Respondent from conducting and/or allowing the operation of EBT’s at 30 Market Street, Vryburg (in the event of the 1^st Respondent having already authorized same);

pending the finalization of an application reviewing and setting aside/declaring unlawful the approval by the 1^st Respondent and/or any official or employee of the 1^st Respondent of the use of EBT’s by the 2^nd Respondent, which application is to be instituted within 30 days from the date the interim relief having been granted;

3. Costs against those Respondents who oppose the application;”

[2] The matter served before my brother Gura. J on 18^th May 2017. On 02^nd June 2017 Gura. J delivered his judgment and granted an order in the following terms;

“[42] It is my considered view that both applicants have failed to make out a case for urgency. Consequently, the application is struck off with costs.”

The matter was thereafter enrolled on 18^th August 2017 for argument on the merits of the application. Due to the unavailability of counsel acting on behalf of the first respondent, it was postponed until 29^th August 2017. On the 29^th August 2017, after listening to the submissions by counsel, judgment was reserved.

 

Background

[3] The first applicant is the holder of a bookmaker licence since 2014. It has bookmaker premises in Potchefstroom, Rustenburg, Vryburg and Delareyville, in the North West Province. The first applicant is therefore a role player in the regulated gambling industry in amongst others, Vryburg. It is contended by the applicant that as a consequence of it being the holder of a bookmaker licence, it may in the future, apply for a site operator licence, entitling it to install and operate a minimum of five limited pay out gambling machines on its premises. The first applicant avers furthermore that it accordingly has a direct interest in ensuring that it competes on an equal footing for its share in the "leisure rand" with other licensed role players in the gambling industry in Vryburg. The term "leisure rand" denotes the amount available in Vryburg to be spent on entertainment and specifically in the gambling industry. According to the first applicant it has a constitutional interest in terms of section 38 (3) of the Constitution, in ensuring that whatever gambling activity takes place under the guise of a gambling licence, is lawful.

[4] The second applicant is a company duly registered and incorporated in terms of the company laws of South Africa, with its main place of business at Market Street, Vryburg in the North West Province. The second applicant is already involved in litigation with the respondents pertaining to the bingo licence awarded to the second respondent because of the serious prejudice it will suffer as a prospective bingo operator should the second respondent be allowed to operate Electronic Bingo Terminals, (EBT’s).

[5] The first respondent is the North West Gambling Board, a legal entity established in terms of the North West Gambling Act 2 of 2001. The second respondent is a company duly registered under the company laws of South Africa, with its main place of business at 30 Market Street, Vryburg, the address at which the second respondent is to operate its business.

[6] On 6 July 2016 the first respondent gave notice in an extraordinary Provincial Gazette that it has awarded a bingo licence to the second respondent to be utilized in Vryburg. The second respondent shortly thereafter commenced with the development of the premises at 30 Market Street, Vryburg, for the purpose of the utilization of its bingo licence.

[7] The second applicant on 29 March 2017 enquired from the first respondent whether it has approved the installation of bingo machines for operation by the second respondent. The applicants state that the second respondent responded on 31 March 2017 in a disingenuous fashion and avoided the enquiry completely, by instead merely stating that there was no decision taken between 10 June 2016 and the date of the issuing of the second applicant's urgent application, in respect of the usage of EBT's by the second respondent. This letter was received on 11 April 2017 by the second applicant.

[8] On the same date, a further letter was submitted to the first respondent recording that the issue was not whether such an approval was made between those dates, but whether there has been such an approval. The request was therefore repeated. On Monday 24 April 2017 the first respondent, in a letter dated 20 April 2017, responded by stating that there is no legal basis for the request and that no documents will be provided. Dissatisfied about the reply, the applicants then launched this application for an interim interdict against the respondents.

 

The Interim Interdict

[9] The requirements for the granting of interdictory interim relief are well established. They are:-

(a) a prima facie right, though open to some doubt;

(b) a well-grounded apprehension of irreparable harm, if the interim relief is not granted and final relief is granted;

(c) the balance of convenience should favour the granting of the interim interdict; and

(d) no alternative remedy.

These requirements should be considered holistically, and none of it must be considered in isolation.

See:  Setlogelo v Setlogelo 1914 AD 221 at 227

Webster v Mitchell 1948 (1) SA 1186 (W)

Olympic Passenger Service (Pty) Ltd v Ramlagan 1957 (2) SA 382 (D)

[10] In National Treasury & Others v Opposition to Urban Tolling Alliance & Others 2012 (6) SA 223 (CC) (hereinafter referred to as the OUTA decision) the Constitutional Court pronounced on the requirements or an interim interdict with reference to the Setlogelo decision. The following is stated in paragraphs [45] to [47]:

“[45] It seems to me that it is unnecessary to fashion a new test for the grant of an Interim interdict. The Setlogelo test, as adapted by case low, continues to be a handy and ready guide to the bench and practitioners alike in the grant of interdicts in busy magistrates’ courts and high courts. However, the test must be applied cognisant of the normative scheme and democratic principles that underpin our Constitution. This means that when a court considers whether to grant an Interim Interdict it must do so in a way that promotes the objects, spirit and purport of the Constitution.

[46] Two ready examples come to mind. If the right asserted in a claim for an interim interdict is sourced from the Constitution It would he redundant to enquire whether that right exists. Similarly, when a court weighs up where the balance of convenience rests, it may not fail to consider the probable impact of the restraining order on the constitutional and statutory powers and duties of the stale functionary or organ of stale against which the interim order is sought.

[47] The balance of convenience enquiry must now carefully probe whether and to which extent the restraining order will probably intrude into the exclusive terrain of another branch of government. The inquiry must, alongside other relevant harm, have proper regard to what may be called separation of powers harm. A court must keep in mind that a temporary restraint against the exercise of statutory power well ahead of the final adjudication of a claimant's case may be granted only in the clearest of cases and after a careful consideration of separation of powers harm. Ii is neither prudent nor necessary to define 'clearest of cases'. However one important consideration would be whether the harm apprehended by the claimant amounts to a breach of one or more fundamental rights warranted by the Bill of Rights. This is not such a case.”

[11] There are three central considerations that underpin the exercise of judicial power when it comes to the granting of interim interdicts against organs of State, and they are:

(a) whether the interim interdict is directed at the exercise of statutory or constitutional powers;

(b) the impact of the restraining order on the principle of separation of powers; and

(c) the more fact that a prima facie right is demonstrated, is not decisive.

[12] In the OUTA – decision, supra, the following is stated at paragraphs [63] to [65].

“63. There is yet another and very important consideration when the balance of convenience is struck. It relates to separation of powers. In ITAC we followed earlier statements in Doctors for Life and warned that:

“Where the Constitution or valid legislation has entrusted specific powers and functions to a particular branch of government, courts may not usurp that power or function by making a decision of their preference. That would frustrate the balance of power implied in the principle of separation of powers. The primary responsibility of a court is not to make decisions reserved for or within the domain of other branches of government, but rather to ensure that the concerned branches of government exercise their authority within the bounds of the Constitution. This would especially be so where the decision in issue is policy-laden as well as polycentric.”

64. In a dispute as the present one, this does not mean that an organ of state is immunised from judicial review only on account of separation of powers. The exercise of all public power is subject to constitutional control.⁴⁰ In an appropriate case an interdict may be granted against it. For instance, if the review court in due course were to find that SANRAL acted outside the law then it is entitled to grant effective interdictory relief. That would be so because the decisions of SANRAL would in effect be contrary to the law and thus void.

65. When it evaluates where the balance of convenience rests, a court must recognise that it is invited to restrain the exercise of statutory power within the exclusive terrain of the Executive or Legislative branches of Government. It must assess carefully how and to what extent its interdict will disrupt executive or legislative functions conferred by the law and thus whether its restraining order will implicate the tenet of division of powers. Whilst a court has the power to grant a restraining order of that kind, it does not readily do so except when a proper and strong case has been made out for the relief and, even so, only in the clearest of cases.”

 

Factual analysis

[13] Of critical importance is to establish whether the prima facie right of the applicant, if it has been established, is such that irreparable harm would arise if the interim order which is sought, is not granted. Put differently, the applicant, must demonstrate that unless an interim restraining order is granted, irreparable harm would result. In my view, an interim interdict is an extra-ordinary remedy within the discretion of this Court. Where an applicant has satisfied all the requirements for an interim interdict, this Court still has a discretion whether or not to grant the interim interdict. However, should an applicant fail to satisfy any one of the requirements, this Court must decline the granting of the relief sought for the interim interdict.

[14] At first the applicants must show that they have a prima facie right, though open to some doubt, which this Court may consider protecting. The applicants contended that they have a vested interest in the gambling industry. The first applicant is the holder of a bookmaker licence in Vryburg. It is contended that the first applicant will in future apply for an operator licence. It intends to compete for its share in the “leisure rand” for entertainment in the gambling industry, with other licence role players, in Vryburg. Furthermore, so it was contended, does the first applicant has a constitutional right under section 38 (3) of the Constitution of the Republic of South Africa, Act 108 of 1996, in ensuring that whatever gambling activity takes place under the guise of a gambling licence, is lawful. The interest of the second applicant extends even further in that it is already involved in litigation with the respondents pertaining to the bingo licence awarded to the second respondent, and further the serious prejudice it will suffer as a prospective bingo operator should the second respondent be allowed to operate EBT’s.

[15] On behalf of the first respondent it was submitted that although the applicants knew about the application for a bingo licence by the second respondent, they failed to object thereto. Furthermore, the first applicant is not a holder of a similar licence to that of the second respondent. It has a bookmaker licence. Therefore, so it was further contended, both applicants failed to establish a prima facie right which is protectable in law.

[16] In Ferreira v Lemin N.O; Vryenhoek v Powel N.O, 1995 (2) SA 813 (W) it is stated:

"It has, up to now, been accepted that in order to establish a prima facie right entitling an applicant to an interim interdict, an applicant has to make out a case that he is entitled to final relief. If on the facts alleged by the applicant and the undisputed facts alleged by the respondent a court would not be able to grant final relief, the applicant has not established a prima facie right and is not entitled to interim protection."

[17] Gura. J, quoting from the submissions made by counsel acting on behalf of the applicants, states:

[13] … This would mean that should the first respondent be allowed to have its decision to allow EBT's in Vryburg implemented, it would place the second applicant at a serious disadvantage should it eventually be granted its bingo licence, as it may then be that no more bingo machines may be issued by the first respondent. The first respondent having been aware of all of this could not, lawfully have authorized EBT's in Vryburg.

[14] The facts set out so far clearly evidences the existence of a prima facie right enjoyed by the applicants and which entitles them to protection from unlawful conduct in the gambling industry. It is pointed out that to allow the second respondent to operate EBT's under these circumstances would be to condone unlawful conduct and the harm, not only to the applicants but society as a whole is self-evident, The first respondent would be allowed to operate a bingo licence through lawful means and therefore cannot lay claim to any inconvenient it may suffer due to the halting of an unlawful act. The applicants would have no alternative remedy under these circumstances to prevent the unlawful operation of EBT's.”

[18] I am holding a different view. The applicants have not established any unlawful conduct on the part of the respondents. The applicants have not established the existence of any right. None of the applicants possess a bingo licence. This means that none of the applicants is currently in direct competition with the second respondent. The applicants allege that the type of EBT’s that the second respondent intends to install at its premises in Vryburg are those that were found to be unlawful in the case of Akani Egoli (Pty) Ltd and other v The Chairperson of the Gauteng Gambling Board and Others case No 17891/08 (Gauteng Provincial Division) as well as in the case of Peermont Global North West (Pty) Ltd v Chairman of the North West Gambling Board 2017 JDR 0094 (NWM). Unlike in the Peermont case, supra, over which this Court presided, no evidence was led with regard to the type of EBT’s (conventional or otherwise) that the second respondent intends to install. The bald, unsubstantiated allegation that the EBT’s are unlawful without any evidence to that effect been produce, is insufficient for this Court to find that the respondent’s conduct is unlawful and need to be prohibited in the interim. This issue can at best be adjudicated upon in the intended review application to be launched by the applicants.

[19] Another requirement for the granting of an interim interdict is that there must be a well-grounded apprehension of irreparable harm if the interim relief is not granted and the final relief is granted.  The relief prayed for in this application has been overtaken by the events. The first respondent has already granted the second respondent permission to operate bingo. A licence has already been granted.

[20] An interim interdict is only appropriate where future injury is apprehended. In National Treasury and Others v Opposition to Urban Tolling Alliance and Others 2012 (06) SA 223 (CC), the following is stated:

“Under the Setlogelo test, the prima facie right a claimant must establish is not merely the right to approach a court in order to review an administrative decision. It is a right to which, if not protected by an interdict, irreparable harm would ensue. An interdict is meant to prevent future conduct and not decisions already made. Quite apart from the right to review and to set aside impugned decisions, the applicants should have demonstrated a prima facie right that is threatened by an impending or imminent irreparable harm. The right to review the impugned decisions did not require any preservation pendente lite.

(emphasis added)

Where the apparent wrongful act which is alleged to give rise to harm had already taken place such as in this case, interim interdictory relief is not appropriate.

[21] It is a requirement that the balance of convenience should favour the granting of the interim interdict. The applicants failed to address the question of the balance of convenience. The second respondent was granted a bingo licence by the first respondent. Upon being granted a bingo licence by the first respondent on 10 June 2016, the second respondent began the process of establishing its bingo operations at 30 Market Street, Vryburg. It did so for almost a year and the process has now been completed. The second respondent's bingo machines were tested and approved by the first respondent on 03 May 2017. The second respondent's bingo operations at 30 Market Street, Vryburg have been up and running since 04 May 2017. The applicants have left the bringing of this application far too late. The balance of convenience does not favour the granting of the requisite relief at this point in time.

[22] If granted, the interim interdict would cause irreparable harm to the second respondent. The second respondent has made a considerable investment in order to establish its bingo operations. The second respondent states that it spent close to R 13 million in order to get its premises ready for bingo operations. The second respondent's investment is secured by various interest bearing loans.

[23] The second respondent's shareholding is made up of at least 60% previously disadvantaged individuals, and the success of its application for a bingo licence depended on it being able to generate a return on investment within three years so as to directly benefit its black economic empowerment shareholders. The benefit to the second respondent's black economic empowerment shareholders will be irreparably delayed, if this Court were to grant the interim interdictory relief sought by the applicants. It is furthermore undisputed that the location of the second respondent's bingo operation is along a busy thoroughfare. For as long as the premises stands vacant and unutilized, the second respondent's business will suffer reputational harm due to the business appearing illiquid and unprofessional. It is not difficult to comprehend that such reputational harm to the second respondent's market will be impossible to quantify, let alone recover.

[24] On 24 March 2017 the second respondent hired a manager, who is paid a salary of approximately R20 000.00 per month. He, in turn, has hired a number of support staff for the second respondent's bingo operation. The second respondent's total salary bill currently amounts to approximately R128 800.00 per month. If the interim interdictory relief sought by the applicants is granted, the second respondent will need to try and retain the services of its manager and support staff or it will have to retrench them.

[25] Since the beginning of April 2016, the second respondent has been paying rent in order to secure the premises at which it is establishing its operations. The second respondent signed a three-year lease agreement and pays R45 600.00 plus approximately R2 336.00 in utilities every month. I am of the view that the balance of convenience does not favour the granting of the interim interdictory relief.

[26] The final requirement for the granting of interim interdictory relief is the absence of any alternative remedy. Although the time for objecting to the granting of the bingo licence has passed and so too, the time to file an internal review process with the first respondent, it does not mean that no alternative remedy is available to the applicants. The applicants can still institute a review under PAIA, if the requirements for condonation is met.

See:  Section 7 (2) of PAIA.

[27] The process under Section 7 (2) of PAIA should have been instituted already. That should have been done in my view, rather than to bring this interim interdict application. I think that upon realising that they missed the opportunity to object to the licence been granted and for the internal review process, the applicants embarked upon this application to create yet another opportunity for themselves to raise an objection or to review the decision taken by the first respondent to grant the bingo licence to the second respondent. That is why they pray for an order “pending the finalization … been granted.” In my view, this is done in order to buy time to institute the review process in the event this Court grant the interim interdictory relief prayed for.

 

Conclusion

[28] Therefore, I am of the view that the applicants failed to make out a case for the granting of an interim interdict. The application should therefore be dismissed. In so far as costs are concerned, it should follow the result and be awarded in favour of the successful litigant, the respondents. There is no plausible reason why costs should not follow the result.

[29] When the matter was on the roll for argument on 18^th August 2017, it was postponed because of the unavailability of counsel acting on behalf of the first respondent even though the date was arranged and agreed upon between the different sets of attorneys. It is only fair and just that the first respondent should pay the costs occasioned by the postponement of this matter on 18^th August 2017.

 

Order

[30] Consequently, the following order is made:

(i) The application is dismissed.

(ii) The applicants are ordered to pay the costs of the application jointly and severally, the one paying the other to be absolved. The costs exclude the costs occasioned by the postponement of the matter on 18^th August 2017.

(iii) The first respondent is ordered to pay the wasted costs occasioned by the postponement of this matter on 18^th August 2017.

 

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R D HENDRICKS

JUDGE OF THE HIGH COURT,

NORTH WEST DIVISION, MAHIKENG

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