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“IN THE HIGH COURT OF SOUTH AFRICA”

NORTH WEST DIVISION, MAHIKENG

                                                CASE NUMBER: M420/2017

In the matter between:-

PEERMONT GLOBAL (NORTH WEST) (PTY) LIMITED        Applicant

and

CHAIRPERSON OF THE NORTH WEST

GAMBLING REVIEW TRIBUNAL                                          First Respondent

NORTH WEST GAMBLING RIVIEW 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

JUDGMENT

GUTTA J.

A.        INTRODUCTION

[1]        The applicant, Peermont Global (North West) (Pty) Limited, in Part A of the application launched an urgent application for inter alia the following order:

“2.        Pending the final determination of Part B, interdicting the fourth and sixth respondents from taking any further steps, to implement the fourth respondent’s decision taken on or about the 10 June 2016 to grant bingo licences to the sixth respondent”.

[2]        In Part B, the applicant applies for the following order:

“1         Reviewing and setting aside the second respondent’s decision taken on or about 29 August 2017 to dismiss the applicant’ internal review application with costs.

2        Reviewing and setting aside the fourth respondent’s decisions taken on or about 10 June 2016 to grant bingo licences to the fifth, sixth and seventh respondents”.

[3]        This Court heard Part A, the urgent interdict which was opposed by the third respondent (Chairperson of the Board), the fourth respondent (the Board) and the sixth respondent (Pioneer).

B.        BACKGROUND FACTS

[4]        On the 2 October 2015, the Board called for applications for bingo operator licences in the North West Province. On the 10 June 2016, the Board granted bingo licences to Pioneer and to the fifth (Jonoforce), and seventh (Latiano) respondents.

[5]        The applicant sought undertakings from Pioneer, Jonoforce and Latiano not to commence business before the conclusion of an internal review. Latiano gave the applicant the undertaking but Pioneer and Jonoforce failed to give the applicant the undertaking not to commence business before the conclusion of the internal review. As a result, the applicant applied for an urgent interdict to interdict Jonoforce and Pioneer from implementing the Board’s decision.

[6]        The interdict application was heard on 11 August 2016, on which date the Court granted the interdict with costs. Hendricks J handed down the written judgment on 13 October 2016 (the interdict judgment).

[7]        The internal review application was heard by the second respondent (the Tribunal) who on the 29 August dismissed the applicant’s review application and awarded costs against the applicant.

[8]        The applicant on the 1 September 2017, addressed letters to Jonoforce, Pioneer and Latiano requesting an undertaking not to implement the Board’s decision by establishing or operating a bingo operation under their licences, pending a review of the Tribunal’s decision to the High Court. Latiano provided such an undertaking. Both Pioneer and Jonoforce were not prepared to provide such undertaking. This resulted in the applicant seeking urgent interdictory relief in Part A of the application pending the review in Part B. Part A was to be heard on 12 October 2017.

[9]        On the 28 September 2017, the Board addressed a letter to the applicant wherein they inter alia undertook not to issue licences to Pioneer and Jonoforce pending the finalisation of Part B, of the application. The applicant on the 29 September 2017, accepted the Board’s undertaking. The applicant copied the letters to all the respondents stating, inter alia that “in the light of the Board’s undertaking, Peermont would not be pursuing the relief sought in Part A of its Notice of Motion”.

[10]      During October 2017, the applicant learnt from an article published in a Klerksdorp newspaper that a bingo operator was to be opened in Klerksdorp on the 1 December 2017. The applicant addressed a letter to Pioneer on the 20 October requesting confirmation that they would “not commence operations pending the finalisation of Part B and without holding a bingo licence issued by the Board”. Pioneer replied in a letter dated 23 October 2017 stating that they held a temporary licence which does not authorise them to operate and that it will only on the grant of a permanent licence be entitled to operate the bingo hall.

[11]      The applicant addressed a further letter dated 24 October 2017 to Pioneer confirming that, in the light of Pioneer’s letter and the Board’s undertaking that Pioneer will not operate a bingo hall pending the finalisation of the review application. They were further informed that any steps taken by Pioneer to establish a bingo operation before such time would be “undertaken at Pioneer’s own risk”. Pioneer did not respond to this letter. The applicant also addressed a letter to the Board. No reply was forthcoming from either Pioneer or the Board.

[12]      The applicant learnt on 1 March 2018 that Pioneer intended opening for business on 2 March 2018. Applicant addressed a letter on 1 March 2018 to Pioneer requesting urgent confirmation that they did not intend to commence operations and they also reserved their right to revive Part A of the application. Pioneer replied in a letter dated 2 March 2018 wherein they attached a bingo licence issued by the Board on 27 February 2018 authorising Pioneer to operate 120 EBT. Pioneer further indicated that it “is entitled to and will now commence its bingo operations as it holds a licence allowing it to do so”.

[13]      The applicant addressed a letter to the Board seeking an urgent explanation of how Pioneer’s licence was issued and also requesting the Board to furnish the applicant with the licencing conditions attached to Pioneer’s licence, a list of names of the EBT that the Board had authorised for use at the premises and whether the Board had issued licences to Jonoforce and Latiano. No reply was forthcoming.

[14]      The applicant filed a supplementary affidavit and revived Part A of the application and enrolled the matter for hearing.

C.        URGENCY

[15]      Both Pioneer and the Board contend that the matter is not urgent and raised the following legal and preliminary points which are dealt with seriatim hereinbelow:

a)      Negligible period for protection;

b)      No interim loss;

c)      The relief sought is moot;

d)      Urgency is self-created

a)        Negligible period for protection

[16]      Pioneer submits that all the papers, except the applicant’s replying affidavit have been filed and that the review application will be heard in a short time and there is no need for this Court to deal with the matter in the “intervening period” or give the applicant interim protection. Similarly the Board contends that the applicant should wait for finalisation of the review.

[17]      Pioneer contends that the applicant failed to act expeditiously in the review application as they had undertaken to do in its founding affidavit and they have to date not filed their replying affidavit. Pioneer contends that the applicant is dominis litis and caused the delay in the review application and cannot rely on the fact that they will not be afforded substantial redress when the matter will be set down for hearing in a short while.

            b)         No interim loss

[18]      Pioneer and the Board alleges that the applicant’s case for urgent interim relief is founded on the fact that it will suffer financial loss but it fails to attach proof of financial loss. The applicant’s claim that it will suffer loss as a result of Pioneer’s operations is based on the report by RBB Economics, and the supporting affidavit of one of the partners thereof, Richard Murgatroyd (Murgatroyd). Murgatryod in his affidavit concludes that “there is a significant risk that a substantial proportion of Peermont’s casinos revenue will be taken by a proximate competitor, and that is far from clear that the entry of the proximate competitor will substantially expand the overall gaming spend in the area” Pioneer contends that Murgatroyds conclusions are vague and speculative and nothing is stated about when such effects might manifest themselves.

[19]      Pioneer contends further that there is no basis for any conclusion that whatever negative effects Pioneer’s operations might have on the applicant’s revenue, such effects are likely to be felt in the short term. The applicant makes out no case that there is any need for the intervention of this Court in the short term.

            c)         The relief sought is moot

[20]      Pioneer alleges that the interdictory relief now sought against the Board and Pioneer is not competent as the applicant seeks an order interdicting the Board and Pioneer “from taking any further steps to implement” the Board’s decision taken on or about 10 June 2016 to grant bingo licence to the sixth respondent.

[21]      Pioneer relies on Section 38 of the North West Gambling Act (the Act)[1] which provides for the steps which constitute implementation of a decision to grant an application for a licence. Pioneer contends that the granting of an application for a licence in terms of Section 38 of the Act leads to a permanent licence being issued and once this occurs, the implementation of the decision is complete and there are no further steps in its implementation. Counsel for Pioneer, Mr McNally submitted that the Act cannot be interpreted to suggest that the operation of a bingo facility once a permanent licence has been issued constitutes a step in the implementation of a decision to grant a licence. Mr McNally submitted that the decision to grant Pioneer a bingo licence is complete and there are no further steps outstanding in order to implement that decision. Hence the relief sought is moot.       

d)      Urgency is self-created and Pioneer was not bound by the Board’s undertaking

[22]      Pioneer and the Board contend that the applicant’s urgency is self-created and Pioneer further contends that the undertaking of the Board was unlawful and not binding on Pioneer for the following reasons:

22.1    on the 14 September 2017, after the Tribunal dismissed the applicant’s review, Pioneer received a letter from the Board that they should commence with the necessary preparations for the commencement of the Bingo operation. They requested inter alia a roll out plan with clear timelines which must cover a period of four months. Pioneer was advised that their temporary licence is available for collection.

22.2    the temporary licence records that a four month period may be extended but subject only to Pioneers compliance with the North West Gambling Act.

22.3    Pioneer had a statutory obligation to take reasonable steps to ensure that its site was ready for operation failing which it ran the risk of losing its entitlement to be issued with a permanent licence.

22.4    The applicant knew that Pioneer had been issued with a temporary licence and that the Board had a peremptory statutory obligation in terms of Section 43(5) to issue Pioneer with a permanent licence upon being satisfied that Pioneer’s premises had been substantially completed and that the conditions and requirements determined by the Board had been complied with. Hence the Board’s undertaking was unlawful.

22.5    The Board took a unilateral decision not to issue the permanent licence to Pioneer. Pioneer was not a party to the undertaking which was a bilateral agreement between the applicant and the Board. Pioneer did not undertake not to operate after the permanent licences were issued.

22.6    The applicant sent a letter to Pioneer enclosing a copy of the Board’s undertaking. Peermont replied and acknowledged that it would not operate without holding a bingo licence.

22.7    During December 2017, Pioneer addressed a letter to the Board where it said that it expected to complete its roll out plan in due course and on completion thereof was entitled to be granted a permanent licence. The Board conducted two inspections and issued Pioneer with a permanent licence. Pioneer was within its right to continue with the preparation of its site in accordance with the roll out and to commence with bingo operations.

22.8    There was no bases for the applicant to assume that Pioneer considered itself precluded from applying for its permanent licence and operating under the licence. The applicant abandoned the original Part A on the basis of an unfounded assumption that Pioneer would not conduct its bingo operation pending finalisation of Part B.

22.9     The applicant made the election not to pursue the relief in Part A of the notice of motion, and conveyed such election to Pioneer. In doing so, it unequivocally chose to abandon its right to pursue that relief, which right was extinguished accordingly. The applicant abandoned its right to seek interim interdictory relief against Pioneer.

22.10  Pioneer alleges that Peermont did not introduce new fact in its founding affidavit or supplementary affidavit to establish any basis for releasing it from its abandonment of the right to seek interdictory relief.

22.11   The principal of Pioneer informed the applicant’s representative during January 2018 that Pioneer would soon open for business as it expected that a permanent licence would be issued by end of January 2018.

[23]      When considering the issue of urgency this Court has taken cognisance of all the background facts referred to in paragraphs 4 – 11 supra. It is common cause that the applicant initially intended proceeding with the interdictory relief sought in Part A on an urgent basis but elected not to pursue with Part A because the Board gave a written undertaking that it would not issue a permanent licence to Pioneer.

[24]      The facts in the interdict judgment before Hendricks J and the facts in casu are similar save for the following:

1)        The interdict judgment sought urgent relief pending the final determination of internal review proceedings, while in casu, the applicant seeks urgent relief pending the review of the internal decision to dismiss the internal review and pending the Board’s decision to grant the bingo licences.

2)        Pioneer was granted a permanent licence and has been operating a bingo hall since the 2 March 2018.

[25]      The reasons for the applicants seeking urgent relief in the interdict judgment, is the same in casu, namely that Pioneer will draw significant custom and revenue away from the applicant in the intervening period as a result of which the applicant will suffer “considerable irrevocable loss”. The judgment of Hendrick J is apposite. Hendricks J in considering those grounds found that the matter was urgent and relied on the case of Millenium Wast Management (Pty) Ltd vs Chairperson, Tender Board Limpopo Province[2].

[26]      The applicant relied on the RBB report and the affidavit of Mr Murgatroyd in support of its submission of significant financial loss. Mr Murgatroyd states that: “the Pioneer operation is likely to have significantly detrimental impact on Rio Casino’s revenues and that this loss in revenue is likely to be felt quickly. Mr Murgatroyd notes that Rio Casino is likely to lose revenue with each passing day that Pioneer operates”.  Hence there is evidence that the applicant’s loss will be immediate and felt in the short term. This Court accepts the RBB’s report and Murgatroyd’s affidavit and the findings contained therein as there is nothing to gainsay those findings. Accordingly this Court accepts that there is a reasonable apprehension that the applicant will suffer irrevocable loss. This aspect will be dealt with more fully infra. This was also accepted by Hendricks J in the interdict judgment. I further agree with applicant’s submission that the urgency since the interdict judgment has now been exacerbated because the permanent licence has been issued and the urgency if Pioneer is allowed to operate their bingo operation is greater.

[27]      I am of the view that there is no merit in Pioneer’s contention that the relief sought is moot because a permanent licence was issued. It is important to consider the context in which the application revived the urgent interdict when interpreting the words “further steps” and one cannot limit the interpretation of “further steps” to Section 38 of the Act. The applicant revived Part A because the Board reneged on the undertaking not to issue permanent licences. Accordingly, I am of the view that, the continued operation of EBT’s constitutes the taking of further steps to implement the Board’s decision to grant the permanent licence and that every step taken by Pioneer in the conduct of its business operations constitutes a further step in the implementation of the Board’s decision.

[28]     The very point of interim interdictory relief is to prevent irreparable harm. The fact that the harm may be suffered for only a short period as the review application could be heard in a few months’ time does not detract from the fact that the Court has a duty to prevent irreparable harm from occurring more especially when considering the prima facie rights set out fully hereinbelow.

[29]      Counsels for the applicant and Pioneer, Mr Snyker and Mr McNally respectively, both appealed to the Court to consider the correspondence exchanged between the Board, the applicant and Pioneer. I have carefully considered the said correspondence and I am of the view that Pioneer’s argument that the applicant is precluded from seeking the relief in Part A because Pioneer had not in its letter to the applicant expressly stated that it would not commence operations pending the finalisation of Part B, is without merit for the reasons set out hereinbelow.

[30]      It is not disputed that Pioneer’s attorney did not take issue with the Board’s undertaking. Pioneer in fact confirmed that its temporary licence did not authorise Pioneer to operate and that it required a permanent licence in order to operate. Pioneer’s silence with regard to their disapproval of the undertaking in this regard is telling. They did not write a letter to either the Board or to the applicant stating in clear and unequivocal terms that they are not bound by the undertaking and that it was unlawful. In circumstances where the Board had already given the undertaking, a reasonable reader of Pioneer’s letter would assume that Pioneer was, in effect, agreeing not to commence operations prior to the finalisation of Part B. The applicant’s attorneys recorded this assumption in their letter to Pioneer’s attorneys of 24 October 2017. Pioneer did not respond to this letter. If Pioneer intended to challenge the Board’s undertaking and were acting in good faith, one would have expected its attorneys to reply to the letter and point out that the applicant’s assumption are incorrect. The applicant could not reasonably have assumed that Pioneer would then put pressure on the Board to issue the permanent licence, and the Board would succumb to the pressure and breach its undertaking and issue the licence without any notification to the applicant. The current attitude of Pioneer to its correspondence is implausible and unfortunate.

[31]      The applicant further submitted that its decision not to proceed with Part A was not solely because of the assumption it had that Pioneer had agreed not to commence operations pending the determination of Part B but also because it would have had no grounds to do so in circumstances where the Board had given an express undertaking not to issue the impugned licences. There is merit in this submission because in the face of such an undertaking by a statutory regulator, the applicant would not have been able to make out the requirements for interim relief, particularly, an apprehension of irreparable harm. For the applicant to proceed in such circumstances would have been futile and would have wasted judicial resources.

[32]      There is no merit in the Board and Pioneer’s contention that the applicant abandoned its right to bring an interdict application as there is no proof that the applicant waived its rights. The applicant only agreed not to pursue with Part A because of the undertaking made by the Board. In view of the Board’s revocation of the undertaking, the applicant was within its rights to seek urgent interdictory relief.

[33]      Accordingly I am of the view that there is no merit in the Board and Pioneer’s submission that the application is not urgent and that any urgency is self-induced. To reiterate the urgency that initially attached to the decision to grant the impugned licences was removed by the Board’s undertaking. It was only when the applicant became aware that this undertaking had been breached and that Pioneer intended to open its doors that the matter again became urgent.

D.        REQUIREMENTS FOR INTERIM RELIEF

 

[34]      It is common cause that the Board’s decision to grant Pioneer a licence constitute administrative action for purposes of the Promotion of Administrative Justice Act, 2000 (“PAJA”) and is thus subject to review on the grounds set out in PAJA.

[35]      For an applicant to succeed with interim interdictory relief pending the review, an applicant must prove:

            35.1    a prima facie right;

35.2    a well-grounded apprehension of irreparable harm if the interim relief is not granted and the ultimate relief (to set aside the impugned decisions) is eventually granted;

35.3    that the balance of convenience favours the granting of an interim interdict; and

35.4    there is no other satisfactory remedy.

Prima facie right

[36]      The applicant’s submits that its prima facie right to interim relief derives from the fact that the Board’s decision to grant a licence to Pioneer falls to be set aside for the following reasons:

a)        the licencing process was unfair;

b)        the unlawfulness of the EBT’s and the Gambling Board’s failure to consider the nature of the EBT’s;

c)         the decision to grant Pioneer a licence contravened the RFA due to the absence of the required “strong motivation” for the location of the bingo operation in the same town as a casino.

[37]      Pioneer alleged that the interdict sought by the applicant is one that impacts directly on the Board’s statutory power to grant a bingo licence. Pioneer relied on the Constitutional Court case of National Treasury and others vs Opposite to Urban Tolling Alliance and Others(OUTA)[3]  that, “a Court must keep in mind that a temporary restraint against the exercise of a 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 consideration of separation of power’s harm”. In considering whether it was dealing with “the clearest of cases”, one of the issues that the Court in OUTA had careful regard to was whether a prima facie case had been made out. Moseneke J referred to Setlogelo vs Setlogelo[4] where the Court considered what the requirement are to establish prima facie and said:

“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 means 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 pendent lite”.

a)           The licencing process was unfair

[38]      The applicant alleged that the licencing process was unfair for the following reasons:

a)         The first is that the RFA on which the licence application and the impugned decision were based, were not disclosed to the applicant.

b)         The second is that, the public inspection of Pioneer’s application excluded significant portions of the application that were material to the applicant’s ability to object to it.

Non-disclosure of amended RFA

[39]      The applicant contends that:

39.1    It is common cause that the applicant did not have sight of the version of the RFA to which the bingo licence applications responded (the amended RFA) and on which they were based and despite repeated requests, the Board refused to make the correct version of the RFA available to the applicant;

39.2   The Board’s approach is fatal to the fairness of its process given that the amended RFA formed the very basis for the applications that served before the Board. It was impossible for the applicant to comment in a meaningful manner on the applications’ compliance with the criteria set out in the RFA without having sight of this document;

39.3    there are several material differences between the March 2015 RFA and the amended RFA. It was materially prejudiced in not having sight of the amended RFA;

39.4    the applicant did not have a reasonable opportunity to make representations and did not have adequate notice of the nature and purpose of the proposed administrative action;

39.5    The decision of the Board materially and adversely affected the applicant’s rights, as the award of licences to EBT operators is in close vicinity to the applicant’s casinos;

39.6    The applicant had, a legitimate expectation flowing from the Board’s consistent practice, in accordance with the provisions of the Act, of allowing interested parties an opportunity to make representations on licence applications;

39.7    In refusing to disclose the amended RFA, the Board stated that the applicant’s request could not be acceded to because the condition for the release of the RFA was a non-refundable amount of R3000 and because the release of the RFA was “time bound”. The reference to the release of the RFA being “time bound” meant that access to the RFA could be obtained only for one week from 2 to 9 October 2015. It was impossible for the applicant to comply with the time frame as applications were only published in November 2016 when the applicant learned that applications had been made and of the proposed locations of those premises.

[40]      The Board and Pioneer both assert that the applicant has not explained how its ability to object to the bingo-licence applications was prejudiced by non-disclosure of the amended RFA. Pioneer also argues that the March 2015 RFA (of which Peermont had sight when it objected) and the amended RFA “did not differ in material respects”.

Public inspection of Pioneer’s application excluded material information

[41]      Applicant contends that:

41.1    material information was omitted from the public inspection of Pioneer’s bingo application.

41.2    It is common cause that the version of Pioneer’s “application” with which the applicant had been furnished did not contain any portion of the actual licence application but consisted entirely of annexures to the application.

41.3    The applicant was a result of the omission of material information and the Board’s failure to furnish the applicant with this information, deprived of the ability to make informed representations to the Board.

41.4     The applicant was prejudiced by the non-disclosure of documents.

[42]      Hendricks J in his judgments considered the grounds raised by the applicant supra and at paragraph 14 of the judgment said the following:

“[14]    Prima facie Peermont, as the applicant, has to proof that a reasonable possibility exist that it will succeed with the internal review. Peermont contended that the licensing process was flawed in that it infringed its right to procedural fairness and materially inhibited its ability to make informed representations on the bingo licence applications for two reasons, nl. (1) the relevant application forms on which the decisions were based was not disclosed to Peermont; and (2) 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. It behoves no argument that it can never be fair to an objector to hide the forms it wishes to object to or to provide an incomplete form which exclude certain important information. 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. So too, was it unfair to exclude significant portions of the applications which made difficult, if not impossible, for Peermont to object. This, and other reasons advanced by Peermont, is in my view sufficient proof that Peermont has a prima facie right to the relief claimed”.

[43]     I have considered Hendricks J’s pronouncement and I am of the view that his pronouncements are persuasive, and correct. There is in the circumstances no reason to differ from his finding. I am of the view that prima facie, the applicant was not given a reasonable opportunity to make representations on Pioneer’s application: It had not been furnished with the actual application and was not furnished with Pioneer’s amended RFA which constituted the basis for the Board’s adjudication of the application. The failure to disclose the amended RFA and Pioneer’s actual application to the applicant, prejudiced the applicant’s ability to make informed and meaningful representations on the bingo-licence applications.

[44]     I am of the view when considering the aforegoing, that prima facie the failure to furnish fundamental information contravened the applicant’s right to procedural fairness, which the Courts have held requires “that an interested party be given access to relevant material and information in order to make meaningful representations” and that such party has “knowledge in advance of the considerations” on which a decision will be based.

[45]     For the reasons set out supra, the Tribunal should have found that the non-disclosure of the amended RFA and relevant portions of Pioneer’s bingo-licence application was procedurally unfair and should have set aside the Board’s decision on that basis.

b)     The unlawfulness of the relevant EBT’s and the Board’s failure to consider the nature of the EBTs

[46]     The applicant contends that:

46.1     Pioneer intends operating conventional EBTs which are the same type that bingo operation in Gauteng are operating which entail automatic “matching” rather than player matching and do not fall within the definition of “bingo” as found in the case of Akani and others vs The Chairperson of the Gauteng Gambling Board[5](Akani);

46.2     Conventional EBTs are not “bingo” in terms of the Act. The definition of bingo in the Act makes it clear that even though the bingo game may be played in whole or in part by electronic means, it is ultimately the players (and not an electronic device) that must match the numbers, pictures or symbols on their card or device to that called out by the operator or announcer. This aligns with the definition of “bingo” in the National Gambling Act 7 of 2004 (“the National Act”)[6].

46.3     In terms of the National Gambling Policy, conventional EBT do not fall within the definition of bingo.

46.4     According to the expert affidavit of Professor Barr (“the Barr affidavit”), regarding to operation of the machines there is no player interaction after the player selects the card and pushes the “play” or “bet” button. The numbers are “called” instantaneously and are automatically “daubed” (matched and marked off) by the terminal and the recipient of the payouts are known immediately.

46.5     The applicant’s representatives played the machines at Pioneer’s premises on the 2 and 3 March 2018 and confirmed that the player does not match the numbers on the bingo card to any ball drawn and there is no player interaction.

46.6     Pioneeer failed to demonstrate that the machines installed at its premises are different (or materially different) to the conventional EBTs dealt with in the Barr affidavit and that were considered by the Court in Akani supra.

[47]     Pioneer contended that the applicant has not established that the EBTs used by Pioneer are conventional EBTs. On the contrary they submitted that:

(i)     the bingo terminals in used by Pioneer comply with the Act;

(ii)    the applicant’s interpretation of the definition of bingo in the Act is misconceived;

(iii)   the Board exercised a discretion in terms of the Act and approved the type and style of bingo operated by Pioneer.

[48]     The High Court in Akani supra held that conventional EBTs did not constitute “bingo” as defined in the National Act. Hendricks in the interdict judgment relied on the Akani supra, when he held at paragraph 15 that:

            “Much has been made during written and oral submissions about the EBT’s that would be installed by licencees Jonoforce and Pioneer. It is quite apparent that it is not convincingly disputed that they were intending to install conventional EBTs, which entails automatic matching and not matching by the player. Peermont contended that this aspect the Board failed to consider. Suffice to state that conventional EBTs are not bingo as defined in the North West Gambling Act. Bingo in the North West Gambling Act. Bingo in the North West Gambling Act does not encompass conventional EBTs. The operation of conventional EBT’s by bingo licencees would be unlawful. Similarly, will it be unlawful to issue a bingo licence to an entity in order to allow it to operate conventional EBT’s. It was furthermore contended by Peermont that this fact was not adequately considered by the Board. This is all the more reason to allow the internal review process to be conducted. I find the ratio in the case of Akani and others vs The Chairperson of the Gauteng Gambling Board (Case no 17891/06 delivered on 30 July 2008) as referred to by Peermont, quite apposite to this present case. So too, the Barr’s affidavit referred to. I am also of the view that conventional EBT’s does not fit the description and definition of “bingo” and are nothing else than a slot machine. So too was the lack of strong motivation as to why a bingo operation should be allowed in the same town as where a casino is located, not properly considered by the Board”.

[49]     Pioneer now, accepts that its EBTs do not involve player matching and said: “[e]ach player’s terminal automatically marks (i.e daubs) any announced numbers that appear on that player’s displayed bingo card”. Board and Pioneer at the internal review however, contended that the definition of ‘bingo’: “includes any similar gambling game operated in whole or in part by electronic means”. The Board contends that the definition of ‘bingo’ in the Act “differs significantly” from the definition in the National Act.

[50]     The 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”.

[51]     The applicant contends that:

51.1     The wording, which appears at the end of the definition, repeats the phrase “any similar gambling game” which appears towards the beginning of the definition. The definition commences: “the gambling game known as bingo and any similar gambling game which …”. It is a well-established presumption of statutory interpretation that the use of the same phrase in a particular statute bears the same meaning. This is particularly the case where the same phrase is used in the very same provision (in this case, the definition of “bingo”)

51.2     Hence the words “any similar gambling game” means a gambling game that is similar to “the gambling game known as bingo” but which, meets the remaining elements of the definition. The final portion of the definition thus merely serves to clarify that a “similar gambling game” contemplated in this definition may be operated in whole or in part by the electronic means.

[52]     The Gauteng Gambling Act amended the definition of bingo to allow for the computer to match the number, pictures or symbols and not the player as provided in the Act (North West Gambling Act) and as previously provided in the Gauteng Gambling Act.

[53]     Prima facie, I am in agreement with the applicant’s contention that the intention behind the words “or similar gambling game” in the definition was to tighten the definition, to make it clear that a gambling game that complied with the listed criteria was “bingo” in terms of the Act, (whether it was the game conventionally known as bingo or some other similar game). This was to avoid an opportunity to argue that a game that met these criteria was not bingo, and therefore did not require a bingo licence. The legislation intended that similar gambling games meet the specified criteria in the definition.

c)     The nature of the applicable EBTs, was relevant to the Board’s decision to grant or refuse bingo licences.

[54]      The applicant contends that the Board did not consider the nature of the applicable EBTs because in a letter dated 30 June 2016, they said they did not “consider the type and style of bingo which the applicant intend offering to the public as that process is distinct”.

[55]      The Board, has a duty when considering a licence application, to consider what activity is proposed to be conducted on proposed licensed premises, and whether this is desirable and appropriate. The registration of equipment process provided under regulation 145 cannot act as a substitute for a proper and informed consideration of the activity proposed to be conducted under a proposed licence, when the licence application is being considered, and this must include the question whether such activity is lawful.

[56]      In deciding to grant the impugned licences without considering the nature of the EBTs to be operated and whether or not they could lawfully be operated under a bingo licence, the Board in my view prima facie failed to apply its mind to relevant considerations and committed a material error of law. The Tribunal erred when it said that “I am persuaded that it is not necessary at this stage to consider or determine whether or not the Electronic Bingo terminals comply with the definition of bingo. This is so, I am persuaded that this issue will only be relevant when the Board considers Electronic Bingo terminals and also if there is a new application to approve Electronic Bingo Terminals. The Tribunal also erred by not providing reasons for its finding that EBTs offer bingo and comply with the definition of bingo in the Act.

d)     Absence of “strong motivation” for the location of the bingo operation in the same town as a casino

[57]      Applicant contends that:

57.1    Paragraph 2.4 of the amended RFA required applicants for bingo operator licences to provide “strong motivation of any application where the intended Bingo Operation will be situated within the same town or city with a casino”.

57.2    Pioneer’s bingo-licence application contained no motivation at all, for the placement of their respective operations in close proximity to Rio Casino.

57.3    This constitutes non-compliance with a procedural jurisdictional fact and renders the decision to grant Pioneer’s licence reviewable. Hendricks J expressed its endorsement of this ground of review in the interdict judgment, concluding that:

            “the lack of strong motivation as to why a bingo operator should be allowed in the same town as where the casino is located (was) not properly considered by the Board”.

[58]      The Board and Pioneer contend that the amended RFA did not require an independent, stand-alone motivation but that Pioneer’s application, read in its entirety, presented a strong case or motivation in favour of granting the application.

[59]      On perusal of the amended RFA it is clear that it required a strong motivation for the grant of a bingo licence in the same town as a casino. Pioneer’s application failed to comply with this requirement. The Board’s decision to grant Pioneer’s licence without compliance lends support to the applicant’s contention that a mandatory and material condition was not complied with and that the decision was reached in a procedurally unfair manner. The Tribunal also erred in failing to consider that the Board granted Pioneer a licence in the absence of the requisite strong motivation for the grant of a bingo licence in the same town as a casino.

[60]      When considering all the evidence and submissions raised in respect of the applicant’s prima facie right I am of the view that the applicant has established a legally protectable right which, if not protected by an interdict, irreparable harm will ensue.

            Irreparable harm

[61]      For an applicant to succeed in its relief for an interim interdict, it must establish a reasonable apprehension of irreparable harm if the interim relief is not granted and the ultimate relief (to set aside the impugned decisions) is eventually granted[7]. The test for harm is objective: the question is whether a reasonable person, if confronted by the facts, would apprehend the probability of harm[8]. It is well-established that the harm required can include financial loss where recovery of the loss is impossible or improbable.

[62]      The applicant submits that, if the interdict sought is not granted, it will suffer irreparable harm in the form of significant financial loss. Pioneer will, in the absence of an interdict, continue to offer conventional EBTs to the general public which will have a material adverse effect on the business of Rio Casino.

[63]      The applicant in support of the aforesaid contention relies on the following:

63.1    Pioneer is licenced to operate 120 EBTs less than 7km from Rio Casino.

63.2    The EBTs are conventional EBTs which have the same look and feel as the casino style slot machine offered at Rio Casino.

63.3    The National Gambling Policy concludes that:

            “the location of EBT sites must be far from the catchment areas of casinos and LPMs to avoid unnecessary competition that will affect the continued viability of those activities”.

63.4    RBB’s report found that the Galaxy operations in Klerksdorp would “likely put a very significant proportion of the Rio Casino’s reviews at risk”.

63.5    The expert economist, Mr Murgatroyd in his affidavit states inter alia that:

i)       The conclusions drawn in the RBB report apply with equal force to the entrance of Jonoforce and Pioneer in close proximity to Rio Casino;

ii)      Rio Casino will suffer significant financial loss if Jonoforce and Pioneere commence operations at their respective premises;

iii)    The RBB report explain that the impact of EBT operations on large casinos cannot be extrapolated to the likely impact of EBT operations on relatively small casinos such as, Rio Casino.

[64]      Pioneer and the Board submitted inter alia that the applicant failed to quantity “financial prejudice” that it will suffer without providing any evidence of the extent of the loss before Part B will be heard and that the applicant failed to establish that it will suffer irreparable harm in the short period before Part B is heard.

[65]      In the interdict judgment, Hendricks J said the following regarding the RBB evidence:

            “The RBB report concerns the potential entrance of a similar placed licensee in Klerksdorp in close proximity to Rio Casino owned by Peermont and, moreover, its relevance is confirmed by the RBB affidavits. Pioneer also did not dispute its relevance in its written submissions at the hearing. The RBB report relies on a host of credible sources for its conclusion that EBTs are alternatives to slot machine. Professor Barr’s affidavit, the Akani judgment, GRC report and NGB report bears testimony to this. It is also expert evidence not countered by any of the parties”.

[66]      As stated supra, there is no evidence to gainsay Mr Murgatroyd’s expert evidence that: “the Pioneer operation is likely to have significantly detrimental impact on Rio Casino’s revenues and that this loss in revenue is likely to be felt quickly. Mr Murgatroyd notes that Rio Casino is likely to lose revenue with each passing day that Pioneer operates”. The fact that Pioneer is operating a mere 7km from Rio Casino is an important consideration. Neither the Board nor Pioneer have produced any expert or empirical evidence, that Pioneer’s EBT operations will not have an adverse effect on the business of Rio Casino.

[67]      In light of the aforegoing I accept that the applicant will suffer financial loss if Pioneer continues its EBT operations pending the finalisation of the review proceedings in Part B and that the applicant it will suffer irreparable harm if the interim interdict is not granted and it is ultimately successful in review. This conclusion is consistent with the decision of Hendricks J in the interdict judgment where he held that:

            “Peermont will undoubtedly suffer irreparable harm if the interim relief is not granted and the ultimate relief is eventually granted. That Peermont will suffer significant financial lost is beyond question”.

            Balance of Convenience

[68]      The test when considering whether the balance of convenience favours the granting of interim relief, is to balance the prejudice to the applicant if interim relief is refused against the prejudice to the respondent if it is granted. It is well-established that:

            “the stronger the prospects of success, the less need for such balance of favour the applicant, the weaker the prospects of success, the greater the need for the balance of convenience of favour him[9]”.

[69]      The applicant contends that, Rio Casino will suffer significant financial loss if Pioneer continues operations at its premises pending the finalisation of the review in Part B. The applicant asks the Court to consider the following when determining the balance of convenience:

69.1    That it relied on a formal undertaking from the Board not to issue a licence to Pioneer in deciding not pursue the relief in Part A.          

69.2    Pioneer did not object to the undertaking at the time and did not raise its objection to the undertaking with the applicant

69.3    The Board, at Pioneer’s instance, subsequently issued the licence notwithstanding the undertaking and without any notification to the applicant.

69.4    The negative consequences that Pioneer may experience pursuant to the Court granting to interim relief would, in contrast, flow directly from Pioneer’s own conduct.

69.5    All steps that Pioneer has taken towards the establishment of its EBT operation were taken with its eyes wide open and with awareness as to the risks.

[70]      Pioneer contends that the balance of convenience favours the refusing to grant the interim interdict for the following reason:

70.1    Pioneer was obliged to take steps to establish its EBT operations in light of the temporary licence issued to it on 14 September 2018

70.2    the Board’s undertaking was unlawful.

70.3    When the applicant initially launched its application, it weighed its own prejudice of lost revenue against Pioneer’s prejudice of “mere deferred enjoyment of the expected operating profits”. It also said that it would reduce the prejudice to Pioneer by undertaking to expedite Part B as far as possible.

70.4    The situation has changed entirely as the prejudice to Pioneer, has increased in that the applicant failed to expedite the hearing of Part B and because it is no longer correct to contend that Pioneer will suffer a mere deferral of enjoyment of profit. The prejudice to Pioneer is definite, immediate and substantial. Any interim order granted in favour of the applicant will put a complete stop to a business which is currently up and running, employing a substantial number of staff, and earning revenue which is critically required for the payment, not only of running expenses, but of accumulated debt.

70.5    Given the very substantial shift in the balance of convenience towards Pioneer (definite, immediate and substantial prejudice to Pioneer compared to speculative and, in any event, short term prejudice to the applicant), there is no basis for granting the applicant the drastic relief that it seeks. The relief, should it be granted, will have the effect of closing down a running business which may, for obvious reasons, never be able to be revived. Such drastic prejudice cannot be justified when measured against the mere possibility of a short-term loss of revenue.

[71]      I am of the view as stated supra, the Board and Pioneer were both aware that the only reason the applicant did not pursue Part A was because the Board had furnished a written undertaking not to issue a licence to Pioneer. I agree with the applicant’s contention that the undertaking originally furnished by the Board, not to issue the licence pending the final determination of Part B, and Pioneer’s acknowledgment that it could not lawfully operate whilst the Board honoured the undertaking, were reasonable and pragmatic in light of the fact that Hendricks J gave the same relief, in relation to the same decisions which are at issue in this matter, pending the determination of the internal review proceedings.

[72]      Section 43(3)(a) of the Act provides that the Board may “at any time after the issue of a licence”, on application by the applicant concerned, extend the specified period within which the holder of the temporary licence is to comply with the conditions or requirements relating to those premises. This period may, in terms of Section 43(4), be extended to a maximum of 24 months. It was open to Pioneer to apply for an extension of the period within which it was required to perform under the temporary licence. It is thus incorrect for Pioneer to suggest that it “ran the risk of losing its entitlement to be issued with a permanent licence unless it was ready for operation by 18 January 2018 or otherwise complied with the Act, the Regulations and its licence conditions”. 11 days after the temporary licence was issued, the Board made the undertaking not to issue a licence to Pioneer pending the finalisation of Part B. One would expect that the Board would not in the circumstances enforce the time period of the temporary licence and would relax the relevant timeframe provided in the Act.

[73]      Pioneer relies on Section 43(5) of the Act to submit that the Board’s undertaking was unlawful as the Act imposed a “peremptory obligation” on the Board to issue a permanent licence to Pioneer when the requirements of that provision were met.

[74]      Section 43(5) provides that, once the Board is satisfied that the premises in respect of which a temporary licence has been granted have been substantially completed, the Board’s conditions and requirements have been complied with, and the premises are suitable, “the Board shall issue a permanent licence in substitution for the temporary licence concerned”.

[75]     I agree with the applicant’s submission that Section 43(5) does not compel the Board to ignore legal challenges to its decisions nor does it prohibit the Board from acting appropriately pending the outcome of such challenges. More particularly, in circumstances where the self-same decision was rendered subject to interim relief by a Court pending the outcome of the internal review proceedings. The Board made an undertaking not to issue the licence pending the review proceeding. This is a legal undertaking which has legal force and effect. Counsel for the Board submission that the undertaking has no legal force and that it withdrew the undertaking because there was a legislative imperative to do so, is astounding.

[76]      Counsel for the applicant submitted that the argument which Pioneer raises is similar to the argument advanced unsuccessfully by an EBT operator before the KwaZulu-Natal High Court in Poppy Ice Trading 18 (Pty) Ltd vs KwaZulu Natal Gaming and Betting Board and Another[10](Poppy Ice). Poppy Ice involved a challenge to the failure of the KwaZulu-Natal Gaming and Betting Board (“the KZN Board”) to implement its decision to amend Poppy Ice’s bingo licence so as to allow for the operation of EBTs (including the KZN Board’s failure to actually amend the licence) in circumstances where the Board’s decision was subject to review proceedings. In refusing Poppy Ice relief, the Court (per Koen J) held, with reference to Section 6(2)(g) read with Section 6(3)(a) of PAJA, that the relief could be granted only if there was a duty to take a decision that was required to implement the first decision and an unreasonable delay in taking the second decision. The Court held, that the KZN Board was not under a duty to implement the first decision by taking the second decision as “the KZN Board cannot be under any duty to make the decisions demanded while the validity of the impugned decision, on which all consequential decisions are premised, is subject to review”.

[77]      The Court’s approach in Poppy Ice also supports the applicant’s contention that it would have been reasonable for the Board to have relaxed the time period for Pioneer to perform under its temporary licence. In light of the Part B review, the Board would have acted reasonably and lawfully in holding the implementation of the impugned decisions in abeyance pending the outcome of the review. The Board’s undertaking was thus not unlawful.

[78]      The applicant contends that time periods that the applicant initially chose for the filing of affidavits and for the hearing to be enrolled were chosen to allow Pioneer and the Board a fair opportunity to answer and for the applicant to reply. As the time periods were relaxed by agreement between the parties, there is no merit in the contention that the applicant failed to expedite the review application.

[79]      When considering the aforegoing, it is apparent that, the Board, without any notice to the applicant, acting in bad faith breached the undertaking it made with the applicant and issued a licence to Pioneer. It is clear from the correspondence exchange between the Board and Pioneer, that Pioneer put pressure on the Board to issue the licence. The applicant had informed Pioneer that any steps that it takes towards the establishment of bingo operation pending the finalisation of the Part B application is taken at its own risk. The conduct of Pioneer and the Board in the present circumstances weighs heavily against them when the Court considers its discretion in relation to granting interim relief.

[80]      This Court cannot sanction Pioneer’s conduct as they took the risk with their eyes open being fully aware that they intended to secure a permanent licence and would operate notwithstanding the undertaking and the pending application.

[81]      Pioneer cannot in the circumstance enjoy the benefits of operating its bingo hall pending the determination of Part B by  persisting with the establishmet of its EBT facility and procuring the issuing a licence in the face of an undertaking which Pioneer knew had been given to Peermont, nor should the Board be permitted to conduct itself in relation to its undertaking relating to the interim position. This threatens the integrity of the Court’s process.

[82]      I agree with applicants that the fact that Pioneer has incurred expenditure and employed staff in establishing its operations, and has now opened its doors for business, should, not weigh heavily in the balance of convenience. On the contrary, the manner in which Pioneer’s licence was granted, and how it commenced operations suggest that the balance of convenience favours the applicant.

            No other satisfactory remedy

[83]      An applicant for interim interdict must show that it has no alternative remedy[11].

[84]     The Board contends that the review application is the alternative remedy. There is no merit in this submission as the review application is pending and the applicant is entitled to apply in the interim for interdictory relief pending the review application.

[85]      Furthermore the applicant has to-date not filed its replying affidavit and the applicants still have to apply for a date for the hearing of the review. The review application was not launched as an urgent application, hence a few months may lapse before the review application is before Court. In the interim the applicant cannot suffer financial loss flowing from Pioneer’s operations. Accordingly I am of the view that there is no other satisfactory remedy.

E.        COSTS

[86]      The applicant applied for a punitive cost order against Pioneer and the Board. I am of the view that such an order is warranted, given that the applicant was been forced to bring this urgent application for interim relief in circumstances where the Board, at Pioneer’s instance, breached the undertaking given to the applicant in the context of this litigation and where neither the Board nor Pioneer notified the applicant of this breach and when a similar interdict was granted previously by this Court.

[87]      Accordingly, an adverse costs award, on an attorney-client scale, is justified against the Board and Pioneer.

F.         ORDER        

[88]      In the result, the Court grants the following order:

a)  Part A is enrolled as an urgent application and the forms and service provided for in the Uniform Rules of Court are dispensed with and the matter is heard as an urgent application in terms of the Uniform Rules of Court.

b)  Pending the final determination of Part B of this application, the Board and Pioneer are interdicted from taking any further steps to implement the Board’s decision taken on or about 10 June 2016 to grant a bingo licence to the sixth respondent.

b)  The fourth and sixth respondents are directed to jointly and severally pay the costs on an attorney and client scale which costs are to include the costs of senior counsel.

________________

N. GUTTA

JUDGE OF THE HIGH COURT

APPEARANCES

DATE OF HEARING                                 :  20 MARCH 2018

DATE OF JUDGMENT                             :  29 MARCH 2018

ADVOCATE FOR APPLICANT                :  ADV F.A SNYKERS (SC)

ADVOCATE FOR 3^RD & 4^TH RESPONDENTS : ADV MATHAPUNA

ADVOCATE FOR 6^TH RESPONDENT             : ADV JPV MCNALLY (SC)

                                                                          ADV JC RICHARDS

ATTORNEYS FOR APPLICANT              :  MAREE & MAREE ATTORNEYS

                                                                   (Instructed by: Webber Wentzel)                      

ATTORNEYS FOR 3^RD & 4^TH RESPONDENTS :  TLOU ATTORNEYS AND ASSOCIATES

                                                                           (Instructed by: Bokwa inc.)

ATTORNEYS FOR 5^TH & 8^TH RESPONDENTS :  ZISIWE ATTORNEYS

                                                                           (Instructed by: Murphys Attorneys)

ATTORNEYS FOR 6^TH RESPONDENTS            : SMIT STANTON INC.

                                                                          (Instructed by: Rushmere Noach Inc.)

ATTORNEYS FOR THE 7^TH RESPONDENTS  : NIENABER & WISSING ATTORNEYS

                                                                          (Instructed by: Cliffe Dekker Hofmeyr

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