Die Vennootskap Bestaande Uit Anton SteynBerg v Vrystaat Dobbel en Drankowerheid and Another (2100/2015) [2015] ZANWHC 54 (28 August 2015)

IN THE HIGH COURT OF SOUTH AFRICA

FREE STATE DIVISION, BLOEMFONTEIN

Case number: 2100/2015

In the matter of:

DIE VENNOOTSKAP BESTAANDE UIT Applicant

ANTON STEYNBERG EN JOHANNA

JACOBA STEYNBERG

and

VRYSTAAT DOBBEL EN DRANKOWERHEID 1st Respondent

DIE VOORSITTER VAN DIE VRYSTAAT 2nd Respondent

DOBBEL EN DRANKOWERHEID

CORAM:

LEKALE, J

HEARD ON: 20 AUGUST 2015

JUDGMENT BY: LEKALE, J

DELIVERED ON: 28 AUGUST 2015

INTRODUCTION AND BACKGROUND

[1] On the 4 April 2014 the applicant partnership lodged an application for a liquor store registration certificate with the first respondent in terms of the Free State Gambling and Liquor Act , 6 of 2010 (the Act). In response to the application the respondents directed a letter to the applicant dated 21 August 2014 effectively advising that the application had been conditionally approved and that a permanent registration certificate would be issued upon submission, by the applicant, of proof of right of occupation within 6 months of issue of the letter in question.

[2] The applicant felt aggrieved by the state of affairs communicated by the respondents and directed letters to them, through its attorney, painstakingly pointing out, inter alia, that proof of right of occupation of premises sought to be licensed was no longer a statutory requirement for issuing legal licences as the case was in terms of the National Liquor Act No. 27 of 1989. In this regard it cited and relied on case law.

[3] The respondents, on their part, maintained that proof of such right was relevant to the application and, as such, they were entitled to require the same as further information relevant to the application in terms of section 28(1) (a) of the act. They further contended that the relevant condition was reasonable within the contemplation of section 29(2) of the Act which authorises the first respondent to impose other reasonable conditions in its discretion in addition to the statutory condition imposed by section 28(1) of the Act.

[4] The parties, thus, failed to find each other on the issue and the applicant now approaches the court on motion for an order:

“1. Dat die Eerste en Tweede Respondente gelas word om ‘n registrasiesertifikaat vir ‘n drankwinkel ten opsigte van die perseel geleë te Die Plaas Mooreville Nr 1668, Heilbron, (Heilbron/Kroonstadpad), Vrystaat Provinsie, uit te reik en beskikbaar te stel aan die Applikant binne 7 (sewe) dae vanaf verkryging van hierdie bevel, alternatiewelik binne sodanige tydperk as wat die Agbare Hof redelik en billik mag ag.

2. Dat die Eerste Respondent die koste van hierdie aansoek betaal op die skaal soos tussen Prokureur en Kliënt, en indien die Eerste Respondent die aansoek van die Applikant opponeer, die Eerste Respondent dan gelas word om die koste van hierdie aansoek te betaal op die skaal soos tussen Prokureur en Eie Kliënt, alternatiewelik sodanige kostebevel wat die Agbare Hof redelik en billik mag ag.”

[5] The respondents opposed the motion by, inter alia, raising two preliminary points which they eventually and expressly declined to pursue in argument

before the court and, thus, effectively abandoned. In opposition they contend that proof of right of occupation of relevant

premises is a sine qua non for issuing liquor licences and/ or authorities in terms of longstanding laudable case law.

DISPUTE

[6] The parties are effectively in dispute over whether or not the first respondent acted in accordance with applicable law when it conditionally approved the applicant’s application in so far as the applicant contends that the respondents acted ultra vires their powers and failed to issue a registration certificate in circumstances where the law obliges them to do so.

CONTENTIONS FOR THE APPLICANT

[7] On behalf of the applicant Mr Pohl submits that in terms of case law proof of right of occupation is no longer a condition precedent to the issue of liquor licences and/ or authorities. Production of such proof is further not a reasonable condition to attach to such licences or authorities within the contemplation of section 29(2) of the Act regard being had to the provisions of section 28(2) of the Act. In his view a reasonable condition contemplated in section 29(2) of the Act would bear reference to what is contemplated in section 28(2) of the Act. The respondents have no business whatsoever, when determining an application for a liquor licence, to consider whether or not an applicant for such a licence is entitled to occupy the relevant premises according to him. He, further, reminds the court that the licensing authority, in the position of the first respondent, is obliged to either register or refuse to register the applicant after considering the application and all relevant factors in terms of section 28(5) of the Act. He, furthermore, points out that the applicant confirmed under oath, in the application, that it has such right to occupy the relevant premises as it rents the same and, further, disclosed the circumstances surrounding the lodging of the application.

[8] Mr Manye submits for and on behalf of the respondents that proof of right of occupation of the relevant premises is not a requirement but its practicality and reasonableness motivated its inclusion, as a condition, to the grant of the registration certificate regard being had to the fact that the premises were already licensed for the purpose of the Act. The reasonableness and practicality of this condition were, according to Mr Manye, recognised by the courts as far back as 1923. It is not prudent to license same premises twice and, as such, when the respondents became aware that the premises were already encumbered with a licence the need to ensure that the applicant was entitled to occupy the same premises became real. The said “judicial product” was in existence when the legislature enacted it as a statutory requirement and remained in existence when the legislature, in its wisdom, deleted it from the National Liquor Act, so Mr Manye points out.

APPLICABLE LEGAL POSITION

[9] Prior to 1989 the courts consistently and authoritatively prohibited licensing authorities in South Africa from granting liquor

licences without first requiring proof of right of occupation of the premises in respect of which licences were sought (Senekal Licensing Court v Stein 1924 AD 506 and Bedesi v Estcourt Rural Licensing Board & Others 1970 (3) SA 211 (N) at 213 F).

[10] In 1989 the legislature effectively bestowed legislative authority on that judicial position when it enacted section 22(2)(d)(i)(aa) of Liquor Act 27 of 1989 which provided that:

“(2) The board shall not grant an application …

(d) for any licence-

(i) unless-

(aa) the applicant concerned; has on the date of consideration of the application for the purposes of the licence applied for; the right to occupy the premises concerned.”

[11] In 1993 the said legislative authority was, however, taken away when the provision in question was repealed and deleted from the Liquor Act and was never reintroduced in any form whatsoever. (See section 8(c) of Act 105 of 1993).

[12] The Act does not contain any similar provision and proof of the right to occupation of the relevant premises is, therefore, no longer a statutory requirement for the granting of a liquor licence as Mr. Pohl correctly points out. (See Wilcaris (EDMS) Bpk & Andere v Williams & Andere 1999 (4) All SA 209 (N); C Beilings & 6 Others v Gauteng Provinsiële Drankraad Case number 20112/2004 and Nkomo v The Gauteng Provincial Liquor Board 19469/2006).

[13] Section 28(1) of the Act allows the first respondent to require further information relevant to the application and to refuse the application if the applicant fails to comply within the stipulated time period.

[14] Section 29(1) of the Act provides that registration “is subject thereto that reasonable access be given to the relevant premises for purposes of inspection by members of the South African

Police Service and inspectors.” On its part section 29(2) effectively authorises the first respondent to issue, at its discretion, the registration subject to any other reasonable conditions.

[15] Regulation 11 of the Act provides that “if any application for registration (including special events registration) is granted, a registration certificate, substantially

in the form of FSLA3 in schedule 1, must be issued)”.

APPLICATION OF LEGAL PRINCIPLES AND FINDINGS

[16] The parties are correctly in agreement that proof of right of occupation of relevant premises is no longer a statutory requirement. They are, however, at variance on the papers, on whether or not such proof is still a judicial condition without which a licence cannot be issued. In argument before the court Mr Manye, effectively, agrees with Mr. Pohl that the proof in question is not a requirement at all but adds that it was attached to the approval in the present matter as a condition in terms of section 29(2) of the Act.

[17] At first glance Mr Manye’s preceding view on such proof of right of occupation appears to be supported by the manner in which the respondents dealt with the application in approving it conditionally as opposed to dismissing it outrightly for want of such proof as the case would have been had the rule in cases such as Senekal Licensing Court v Stein (supra) been applied.

[18] A closer look at the “conditional authority” as granted by the respondents against the provisions of the Act, however, suggests the contrary and paints a different picture. It is not the respondents’ express case that they invoked section 28(1)(a) of the Act when they issued the “conditional authority” in question. On the facts as presented by them the impression created is that they could not have, reasonably possibly, acted in terms of section 28(1) (a) of the Act because that provision is clearly aimed at assisting the licensing authority to determine the application while, in the instant matter, the application has already been approved albeit conditionally. In this regard the “conditional authority”, on its part, effectively indicates that the application was considered and found to be deserving of conditional approval due to the need for proof of right of occupation. As Mr Pohl correctly submits, once the first respondent was satisfied that the application met the requirements set out in the Act it was obliged to grant the same together with a certificate in the prescribed form according to regulation 11 of the Act.

[19] The Act does not make provision for conditional approval or conditional authority. It is, therefore, possible that the

respondents effectively regarded proof of right of occupation as a conditio sine qua non regard being had to the fact that the “conditional authority” in question is expressly “not an authority to trade”. Unless the requirement for proof of right of occupation is, in fact, a section 29(2) condition the “conditional authority” is, in my view, in effect a section 28(1)(a) requirement for further information masquerading as a “conditional authority”

which would only be converted into a registration certificate entitling the applicant to trade only upon submission, by the applicant, of the required proof of right of occupation within 6 months of its issue. Failure by the applicant to submit such proof would implicitly result in the application being refused.

[20] Following decisions such as Wilcaris(EDMS) Bpk en Andere v Williams en Andere (supra) I am in respectful agreement that it was not the legislature’s apparent intention to turn the clock back and restore the legal position which prevailed prior to 1989 when it deleted the relevant provision from the 1989 Liquor Act. If it was its intention to preserve the status quo ante it would, in my view, simply have left the provision intact.

[21] The final question is, therefore, whether or not such proof of right of occupation of the premises sought to be licensed was “other reasonable conditions” contemplated by section 29(2) of the Act. It is clear from the reading of section 29 as a whole that the conditions contemplated are to apply upon and after registration as opposed to assisting the licensing authority in the determination of the application in so far as section 29(2) reads:

“(2) the authority may also issue the registration subject to any other reasonable conditions.”

[22] In the instant matter no registration has been issued and according to the letter of “conditional authority” directed to the applicant “Liquor Store Registration will be issued upon submission of proof of right of occupation within six (6) months of issue.” The requirement for proof of right of occupation in the present matter is, thus, not a condition contemplated by section 29(2) of the Act because contemplated conditions apply upon and because of registration and not in order to be registered.

[23] The so called “conditional authority” is, in my judgment, a requirement by the first respondent for proof of right of occupation before registration can be issued. In this regard it should, further, be noted that the Act does not provide for approval of applications. It states, in no uncertain terms, in section 28(5) that “after considering the application and all relevant factors the board may either –

(a) register the applicant; or

(b) refuse to register the applicant.”

[24] The respondents, therefore, wandered far beyond their powers and effectively ignored the Act. The matter was, further, allowed to drag on from August 2014 all to the clear prejudice of the applicant partnership which is obviously keen to trade and would, in the process, create employment. I am satisfied that, but for the requirement for proof of right of occupation, registration would have been issued in favour of the applicant. As correctly submitted for the applicant, I am, further, convinced from the papers that even if such proof was, in law, a requirement same was adequately furnished regard being had to the application which served before the respondents.

COSTS

[25] On the papers the applicant beseeches the court to direct the first respondent to pay costs on a scale as between attorney and own client regard being had to its conduct in opposing the application and intensive communication between the parties which preceded the instant motion in which the applicant’s attorney repeatedly drew its attention to applicable legal position. Mr Pohl, on the other hand, argues in favour of costs on the scale as between attorney and client. I am persuaded that the present is, indeed, a matter in which the court should express its disapproval of the manner in which the first respondent dealt with the matter in, inter alia, issuing a process like “conditional authority” which is foreign to the Act and has the effect of burdening the applicant

unfairly and subtly with a requirement not prescribed by its empowering legislation. I am, however, satisfied that costs on the scale as between attorney and client, as opposed to attorney and own client, would adequately convey the court’s disapproval and concern in this regard.

ORDER

[26] In consequence the respondents are directed to issue and make available to the applicant a Liquor Store Registration Certificate in respect of the premises at the farm Mooreville no. 1668, Heilbron, (Heilbron/Kroonstad Road) Free State Province within 10 days of the date hereof.

[27] The first respondent shall pay applicant’s costs on a scale as between attorney and client.

_____________

L.J. LEKALE, J

On behalf of applicant: Adv. L. Le R Pohl SC

Instructed by:

Honey Attorneys

BLOEMFONTEIN

On behalf of respondents: Adv. TL Manye

State Attorney