Lesotho Hotels International (Pty) Limited v Minister of Tourism, Sports and Culture and Others (C of A (CIV) 18 of 1998) [1998] LSCA 80 (31 July 1998)

IN THE LESOTHO COURT OF APPEAL HELD AT M A S E RU In the matter between: LESOTHO HOTELS INTERNATIONAL Case No: C of A (CIV) 18/1998 (PTY) LIMITED Appellant and THE MINISTER OF TOURISM, SPORTS and CULTURE First Respondent THE CHAIRMAN OF THE CASINO BOARD Second Respondent THE COMMISSIONER OF POLICE Third Respondent THE ATTORNEY-GENERAL Fourth Respondent J U D G M E NT Date of hearing: 29 July 1998 Date of judgment: 31 July 1998 Page 2 GAUNTLETT, JA The appellant, the applicant in the court below, is a trading corporation which conducts hotel operations at various places in Lesotho. On 30 March 1993, following applications it had made pursuant to the Casino Order 4 of 1 989, it was issued with "authorisations" by the first respondent "to operate slot machines" at various stipulated hotel premises, "valid for a period of ten years, in terms of section 12(1)(a) and (b) of the Casino Order No. 4 of 1989". The appellant then applied to the second respondent, the Chairman of the Casino Board, for the issuing of licences to operate slot machines only at the same venues, in terms of section 10 of Order 4 of 1989. In a founding affidavit filed on behalf of the appellant, it was asserted that in February 1994 it was orally informed by an unspecified "representative of the second respondent" that all the applications had been approved by the second respondent in terms of section 10 of Order 4 of 1 989. Thereafter however, despite repeated requests on behalf of the appellant, the second respondent failed ever to issue the licences. This (it is said) was despite the tendering of payment on behalf of the appellant stipulated by the second respondent in respect of two of the hotel premises. Page 3 The appellant asserts that this inaction was coupled with active harassment, which it ascribes to a personal vendetta on the part of the Principal Secretary of the first respondent because he was a director of Sun International in Maseru and accordingly had an interest in the frustration of the appellant's slot machine operations. Ultimately certain police raids took place as a result of which slot machines were forceably removed from the appellant's premises. As a result it instituted an urgent application, in which it sought a final interdict restraining the first and fourth respondents from seizing the slot machines, directing the third respondent (the Commissioner of Police) to return all slot machines seized to date, and directing the second respondent forthwith "to issue the casino licences granted to the [appellant] on or about 24 February 1994 in terms of section 10 of the Casino Order 1989..." as regards the specified hotel premises. In addition, a declarator was sought authorising the appellant to conduct its slot machine business at its various premises. In answer, the first respondent filed an affidavit by the erstwhile Principal Secretary (during the period August 1993 to November 1996), in which capacity he also served as the second respondent during that period, pursuant to the provisions of section 3(1) of Order 4 of 1989. He testifies that on discovering that the appellant had been operating slot machines in 1994, he investigated the matter as a result of which the authorisations upon which the appellant relies came to his attention. Page 4 He contends that these are both unlawful and fraudulent: unlawful because section 6 of Order 4 of 1989 states that the third respondent was responsible for the issue of authorisations and licences under the Order, and fraudulent because the authorisations were issued by the then Minister in the then outgoing government "with indecent haste....just a few hours before his tenure as a minister was to end". He says furthermore that the second respondent in early 1993 had rejected the appellant's application for authorisation to establish and operate a casino. The deponent points furthermore to various other requirements in terms of Order 4 of 1989, and states that the appellant did not comply with any of these requirements and that accordingly the second respondent could not have issued a casino licence. He denies various other allegations, in particular the suggestion that he had any personal vendetta against the appellant. He states that it was in his official capacity as Principal Secretary of the Ministry of Tourism that he was nominated by the Government as a member of the board of Sun International; he himself had no pecuniary interest in its operation at any time, and no longer for that matter serves on the Board. A supporting affidavit was also filed on behalf of the Chairman of the Casino Board during the period October 1992 to 31 March 1993. He states that there were Page 5 several applications from the appellant (and others) for the grant of authorisations to operate casinos under Order 4 of 1989. He says that the Board "carefully considered the applications and rejected all of them". As regards the authorisations on which the appellant relies, he contends that the then Minister of Tourism, Sports and Culture "[was] certainly not the authorised signatory. He had no legal authority to issue an authorisation to operate slot machines as it is the legal responsibility of the Casino Board". The deponent also evinces surprise that the Minister should have purported to act in terms of section 12 of Order 4 of 1 989: "I was even surprised that if the Minister was considering the appeal from the [appellant] the relevant papers never passed through my hands as it should have according to the legally established government procedure. I have no doubt in my mind that [the authorisation] is an irregular and illegal document. I am also shocked that the Minister thought it fit to issue the so-called authorisation on the last day of his office as a minister". In reply, the appellant seeks to dispute the authority of the respondents' deponents to act on their behalf. This issue was rightly not pursued before us. For the rest, the reply asserts that the appellant "was acting under the bona fide belief that licences had been granted" and that this is not denied. The contention is obviously incorrect: the opposing papers squarely put in issue the regularity of the authorisations in a manner which doubts the propriety of the appellant's reiiance thereon. For the rest, the affidavit asserts that there is "no evidence before this Honourable Court that the authorisations are not authentic", and that as a matter Page 6 of legal argument (it was not necessarily the duty of the Board to issue authorisations or licences granted on appeal". In its judgment, the court below (Lehohla, J), rightly not accepting that an estoppel was established on the papers (more particularly in view of the vigorous denial on the part of the respondents that the unnamed functionary could ever have orally represented that licences had been granted, as the appellant asserted), held that "it would seem untenable to subscribe to the view that an authorisation may serve as a substitute for a licence". It accordingly dismissed the application, awarding the respondents 80 per cent of their costs against the applicant (by virtue of the dilatoriness of the fifth respondent and certain wasted costs to which this gave rise). The notice of appeal asserts four grounds: "1. That the Court a quo erred in holding that a valid licence issued under section 10 of the Casino Order 4 of 1989 is a sine qu non for the lawful operation of a casino or slot machine operation. 2. The Court erred in holding that the 1993 authorisations of the Minister had no legal effect and that another authorisation should have been granted. 3. The Court erred in holding that the failure to produce a casino licence on demand, per se entitles a Warrant Officer to seize slot machines operated on that premises. 4. The Court erred in holding that an authorisation is not regarded as the equivalent of a licence for purposes of operation under the Casino Order". Page 7 Central to the appellant's argument is a three-fold proposition: that the authorisations in question were validly issued; that they have the effect in law of conferring a right to operate slot machines until such time as a final decision is taken in relation to a licence; and that a final decision in relation to the appellant's applications for licences indeed has yet to be taken. The answers to be given to these central questions determine the appellant's entitlement to the final relief it seeks in the form of the negative and positive interdicts, as well as the declaratory order, summarised above. In relation to the first inquiry, the appellant's argument was advanced on two bases. The first was that the court has no power to treat as invalid the authorisations, as in the absence of a declarator or judicial review, setting them aside, these stood. (More simply put, they could not be the subject of collateral review in these proceedings). The second basis was that on new evidence which we should entertain on appeal, the authorisations were valid. As regards the former basis, it was the contention by the appellant in argument before us that it "is entitled to act as if authorisation had been duly granted to it, until and unless the said authorisation is set aside by a court of law" (Appellant's heads, paragraph 5). That proposition is both too broadly stated, and is not supported by the authorities cited in support. In Winter v Administrator-in-Executive Committee 1973 (1) SA 873 (A), Ogilvie Thompson CJ held (see 891A-B) that "a manifest absence of jurisdiction (within the meaning of that expression as used in Fakir's and Page 8 Narainsamy's cases, supra)" would warrant a court holding invalid administration acts not themselves yet formally reviewed and set aside. The full references on which Ogilvie Thompson, CJ relied in this regard are two leading decisions both by Innes, CJ. In Union Government v Fakir 1923 AD 466 at 469-470, Innes, CJ said this: "Cases may be conceived in which interference would be justified. If there were a manifest absence of jurisdiction or if an order were made or obtained fraudulently, a competent court would be entitled to interfere and would interfere.... The fact that an order purports to be done under the Act will not exclude the interference of the courts, where there was no jurisdiction to deal with the matter at all or where it has been dealt with not bona fide but fraudulently". And in Narainsamv v Principal Immigration Officer 1923 AD 673 at 675, "the same distinguished Chief Justice" (per Ogilvie Thompson CJ in Winter'scase supra at 887A) said that "....a case for the interference of a court might arise where the action taken had been manifestly outside the jurisdiction conferred by the Act, or where fraud or a similar element was found to have been present". Exactly the same point is made in the decision in Coalcor (Cape) Pty) Ltd v Boiler Efficiency services CC 1990 (4) SA 349(C), upon which the appellant seeks to rely. It is in this passage (at 358C) that Farlam, J (citing Wade administrative law Page 9 5th ed at 314 and a New Zealand judgment by Cooke, J (now Lord Cooke of Thanketon)) refers to 'comparatively rare cases of flagrant invalidity" as an exception to the general rule that a court will not interfere with an administrative decision which has not yet been set aside. The appellant cites the same passage from the same citation of W a de as authority before us. Reference to the current edition (Wade & Forsythe Administrative Law (7th ed 1994) makes it however even more clear that, although the debate as to whether fraudulent administrative decisions are void or voidable is unresolved, in English as well as South African administrative law (see now Transnet v Voorsitter. Nasionale Vervoerkommissie 1995(3) SA 846 (T). disapproving the decision in Coalcor, supra), as common sense would suggest, where an act (in Lord Radcliffe's vivid phrase) bears "the brand of invalidity upon its forehead" (Smith v East Elloe Rural District Council (1956) AC 736 at 769) it may indeed be treated as a nullity. (See further De Smith Woolf & Jowell Judicial Review of Administrative Action (5th ed 1995) 262- 265). That being so, we are not precluded from considering the question whether on the facts of this matter the authorisations suffer from manifest illegality in the requisite sense. Page 10 The appellant sought in this regard (the second basis for its first proposition, namely that the authorisations were validly issued) to put further evidence before us. We were referred in the appellant's written argument (paragraph 6.2) to the established requirements for the production of new evidence on appeal, in reliance on the decision in Simpson v Selfmed Medical Scheme and Another 1995 (3) SA 816(A) at 825B-E. In addition to those requirements to which reference was made - a lack of remissness in respect of the production of evidence earlier, weighty and material evidence engendering a belief in its correctness; and absence of prejudice to the other party flowing from the late production - Simpson'case, supra, and many earlier decisions make it plain that an applicant in such circumstances must show that the evidence is such that if adduced, it will be practically conclusive, while the court must also be satisfied that the evidence could not have been procured earlier by the exercise of reasonable diligence. The departure point is that there should be finality to a trial, and that it is only in truly exceptional circumstances that such an application should be granted (see generally Herbstein & van Winsen (Civil Practice) (4th ed 1997) 909, 909, and the further authorities there collected). Suffice it to say that in my view no proper explanation has been put before us demonstration that the appellant could not by reasonable exertions have obtained the documentation earlier. It after all was itself the appellant in the administrative appeal to the Minister. It does not explain why it itself had no records of the Page 11 alleged appeals, or could not at least in reply have substantiated their existence. It plainly made an election to proceed on the papers as they stood in circumstances which, although attended by some urgency, were not so urgent as obliged it to adopt that course. It has offered no adequate explanation as to why the documentation was obtained only at this late stage. The application to adduce further evidence on appeal is accordingly refused. That being so, the question is whether the papers before the court below established a valid authorisation. In these circumstances applying the trite law applicable to motion proceedings, and given in particular the failure by the appellant in reply to refute the pertinent attacks advanced by the respondents on the authenticity of the authorisations, in my view their validity is not established. The appellant is not assisted by its endeavour to invoke the omnia praesumuntur rite esse acta principle; this, it has been repeatedly stated, is a presumption to be used with great circumspection and which applies in essence to matters of form and not substance (see Hoffmann & Zeffert SA law of Evidence (4th ed 1988)545 et seq, and authorities there collected). The appellant in these circumstances, given the dispute of fact in the third category of the decision in R o om Hire Company (Pty) Limited v Jeppe Street Mansions (Pty) Ltd 1949 (3) SA 1155 (T) at 1163, should have sought a referral to oral evidence to re Page 12 to proceed on that basis and grant final relief (Plascon-Evans paints limited v Van Reiebeek paints (Pty) Ltd 1984 (3) SA 623 (A) at 634H-635B). To sum up. The foundation of the appellant's case is that (while it held no licence) it was duly authorised by the first respondent to conduct slot operations at its designated hotel premises. It sought both final interdicts and a declaratory order on that premise. But that premise was denied by the respondents; evidence was adduced which indicated that the authorisations were illegally granted. The appellant nonetheless elected to argue the matter on motion - although the initial hearing sought as a matter of urgency had had to be postponed, and a clear dispute of material fact existed. The attempt to remedy the situation by leading new evidence on appeal fails to meet the stringent requirements which apply. In the result, the validity of the contentious authorisations was not established, and the court a quo did not err in its ultimate conclusion that the appellant was not entitled to the relief it sought. It should however, with respect to the learned judge, have given effect to the rule relating to a material dispute of fact in motion proceedings, which underpins both the authorities cited above and their repeated reiteration by this court (see the judgment in the related appeal, C of A (CIV) 17/98). For the reasons stated in the judgment in C of A (CIV) 18/98. I am also of the view that this court should not remit the matter for the hearing of oral evidence. I would Page 13 accordingly resolve the first issue outlined above against the appellant. As a result, the two remaining inquiries become moot. The appeal is accordingly dismissed with costs, including the costs of the application to lead new evidence and including in each instance the costs of two counsel. J. J. G A U N T L E TT J U D GE OF A P P E AL J. B R O W DE J U D GE OF A P P E AL R. N. L E ON J U D GE OF A P P E AL I agree I agree Delivered at Maseru on this 31st day of July 1998.