Peermont Global North West (Pty) Ltd v Chairperson of the North West Gambling Board and Others (M3/2016) [2016] ZANWHC 66 (13 October 2016)

IN THE NORTH WEST HIGH COURT, MAHIKENG

CASE NO: M3/2016

Reportbable: No

Circulate to Judges: No

Circulate to Magistrates: No

Circulate to Regional Magistrates: No

In the matter between:

PEERMONT GLOBAL NORTH WEST (PTY) LTD Applicant

and

CHAIRPERSON OF THE NORTH WEST

GAMBLING BOARD 1st Respondent

NORTH WEST GAMBLING BOARD 2nd Respondent

JONOFORCE (PTY) LTD 3rd Respondent

PIONEER BINGO NORTH WEST (PTY) LTD 4th Respondent

DATE OF HEARING : 11 AUGUST 2016

DATE OF REASONS FORJUDGMENT : 13 OCTOBER 2016

COUNSEL FOR APPELLANT : ADV. FA SNYCKERS SC

COUNSEL FOR THE 1ST AND 2ND RESPONDENT : ADV. D WILLIAMS SC

MR. H GROENEWALD

COUNSEL FOR THE 4TH RESPONDENT : ADV. SC RORKE SC

J.G RICHARDS

REASONS FOR ORDER

HENDRICKS J

[1] On the 11th August 2016, after listening to the submissions of counsel, I granted an order in the following terms:

“1. THAT: The non-compliance with the terms of Uniform Rule 6(12) with regard to forums and service is condoned and the matter is treated as one of urgency;

2. THAT: Pending the final determination of internal review proceedings the Third and Fourth Respondents are interdicted and restrained from implementing the second Respondent’s decision taken on or about the 10th day of JUNE 2016 to grant bingo licences to the Third and Fourth Respondents;

3. THAT: The application to strike out certain paragraphs of the founding affidavit and certain annexures (and confirmatory affidavits) be and is hereby dismissed with costs;

4. THAT: The counter application to stay the main application pending the finalisation of the review application the Fourth Respondent has brought to challenge the constitutionality of the Review Regulations be and is hereby dismissed with costs;

5. THAT: The First, Second and Fourth Respondents are to pay the costs of this application jointly and severally, the one paying the other to be absolved;

6. THAT: If reasons are required, some must be applied for within ten (10) days from this date of this order.”

A notice to request reasons for the order was filed with the Registrar of this Court on 17th August 2016. This notice was received by my secretary only on the 3rd October 2016 and brought to my attention the following day. I addressed a memorandum regarding this issue to the Judge President of this division and copied the Court Manager and the Office of the Registrar and raised my concerns about the inordinately long delay in bringing the notice of request for reasons for the order and the court file to my attention. Had it been brought to my attention earlier, the reasons would have been provided much earlier. The delay is indeed regrettable. Here follow the reasons for the said order of the 11th August 2016.

[2] On 02 October 2015 the North West Gambling Board (“the Board”) called for applications for bingo operator licences in the North West Provinces. An amended request for applications was said to be available between 2 and 9 October 2015 upon payment of a fee. On 26 November 2015 the Board published a notice indicating that it has received applications from inter alia Jonoforce (Third Respondent), Pioneer (Fourth Respondent) and Latiano (Sixth Respondent). Written objections were also invited.

[3] Peermont (the Applicant), after obtaining public inspection copies of the various applications, submitted written objections. The Board, in response to Peermont’s objections stated that Peermont has used the incorrect forms. The Board stated that Peermont was required to use the amended request for applications and paid the non-refundable fee of R3000.00, which it did not do. However, the said amended request for applications was not available on the website of the Board.

[4] Jonoforce and Pioneer communicated in writing to Peermont’s objections. Peermont in turn sent its replies to these responses to the Board. Public hearings were conducted during which Peermont made oral submissions in the form of objections to both these

applications, amongst others, on 24 May 2016. On 10 June 2016 the Board took a decision to grant bingo licences to, amongst others,

Jonoforce, Pioneer and Latiano. Peermont received confirmation of this decision on 01 July 2016. The Board’s decision was

published in the Provincial Gazette on 06 July 2016.

[5] Peermont’s attorneys of record wrote letters to all the licencees, notifying them that Peermont intended to bring an internal

review against the award of the licences to them and requested them to undertake not to implement the decision by the Board pending the outcome of the internal review. Latiano gave an undertaking not to commence with business whilst Pioneer refused to grant such an undertaking. Jonoforce did not reply. On 06 July 2016, the same day of the publication in the Provincial Gazette of the granting of the licences by the Board, Peermont notified the Board of the intended internal review proceedings. The Board responded thereto on 21 July 2016 by stating that Jonoforce, Pioneer and Latiano met the evaluation criteria.

[6] Peermont contended that this application was urgent whilst the Respondents contended that it was not. Peermont learnt about the licences been granted which was confirmed by the Board. Six (6) days after the said confirmation by the Board, this application was launched. This was done as expeditiously as possible. The Board contend that the matter is not urgent because the licencees will only commence business within a four months period after the granting of the licences, which means that this application could have been brought in the ordinary course. This application was therefor prematurely brought, as contended by the Board. On the other hand Pioneer submitted that Peermont unduly delayed in bringing this application and thereby caused the alleged urgency to be self – created. These two contentions are mutually destructive. Unlike Latiano who gave an undertaking not to commence with business, Pioneer and Jonoforce did not give such an undertaking. Had such an undertaking been given, it would not have been necessary to approach this Court on an urgent basis for relief.

[7] The Board’s contention that both Jonoforce and Pioneer will not start operating before November 2016 loose sight of the fact that Jonoforce and Pioneer did not want to commit themselves to such an undertaking. There is no guarantee that Peermont could get redress in the ordinary course before November 2016. I find the following dictum in the matter of Millennium Waste Management (pty) Ltd v Chairperson, Tender Board Limpopo Province 2008 (2) SA 481 (SCA) quite opposite:

“[34] In conclusion there is one further matter that needs to be mentioned. It appears that in some cases applicants for review approach the High Court promptly for relief but their cases are not expeditiously heard and as a result by the time the matter is finally determined, practical problems militating against the setting-aside of the challenged decision would have arisen. Consequently the scope of granting an effective relief to vindicate the infringed rights becomes drastically reduced. It may help if the High Court, to the extent possible, gives priority to these matters.”

It is for these reasons, amongst others, that I find that the matter is urgent.

[8] On behalf of the Board and the Fourth Respondent it was contended that some of the necessary parties are not before court. In this regard, reference was made not only to Metro, Latiano and Eliocube who are licencees that were granted bingo licences by the Board, but also other licencees that were previously granted licences, as well as the manufacturers of the electronic bingo terminals (EBT’s). The short answer to the contention of the non-joinder of these parties is that these parties or entities may be interested in the outcome of the main application but that does not make them necessary parties to be joined. They have no direct and substantial interest in the relief that was sought by Peermont. Neither the existing licencees nor the EBT manufacturers will be directly affected by the order sought by Peermont, which seeks to prevent the implementation of the decision to grant Pioneer and Jonoforce licences.

See: Amalgameted Engineering Union v Minister of Labour 1949 (3) SA 637 (A)

Judicial Service Commission and Another v Cape Bar Council and Another 2013 (1) SA 170 (SCA)

[9] An application was also launched by the Fourth Respondent to strike out certain portions of the founding affidavit, its annexures as well as the confirmatory affidavits. It was contended that

· references to the public hearings in Peermont’s founding affidavit is hearsay. This is based on the fact that Pioneer claims that the confirmatory affidavit of Mr. Smith, attached to Peermont's founding affidavit, does not expressly confirm what happened at the hearings. The only reference to Mr. Smith in the founding affidavit is at paragraph 4, where it states that he confirms the contents of the hearings. Therefore, the only sensible reading of Mr. Smith's affidavit, when he confirms Peermont's founding affidavit in so far as it relates to him, is that he confirms the references to the content of these hearings. Any conceivable cause for objection is in any event cured by Mr. Smith's confirmatory affidavit filed with Peermont's replying affidavit.

· Peermont's heads of argument for the hearings were not prepared by the deponent to the founding affidavit, the author has not attested to an affidavit confirming their contents and their contents are not incorporated into the founding affidavit. It was contended by Peermont that the heads were handed to both the Board and Pioneer at the hearing and the heads were therefore before the Board when it made its decision. To the extent they are relied on in the founding affidavit, specific parts are incorporated by reference. It is of no consequence to their relevance that the deponent was not the author.

· Peermont's replies were not before the Board. Contrary to the Pioneer's contentions, the Act does not expressly preclude an objector from replying. Relevant portions of the replies were confirmed in Peermont's heads of argument which were before the Board.

· Professor Barr's affidavit is not an affidavit contemplated in the Rules of Court and the certifying commissioner did not state the place and date of the declaration. This affidavit was before the Board at the hearings. Its authenticity or admissibility was accepted by the High Court in the Akani matter, referred to in paragraph [15] hereunder. Neither the Board nor Pioneer took issue with the affidavit in written objections or at the hearing. It therefore would have been irrational for the Board to ignore it in coming to its decisions. Professor Barr has in any event confirmed its contents under oath. There can be no objection to its relevance.

· Professor Barr's affidavit is inadmissible as he is not an expert. Pioneer makes no case for this contention. Professor Barr’s impressive curriculum vitae is attached to Peermont's founding papers, and in Professor Barr's confirmatory affidavit to Peermont's reply which demonstrates his considerable experience in relation to the operation of gaming machines as well as his expertise in statistics and economics in the context of the gambling industry. The High Court in the Akani matter (see paragraph 15 infra), also willingly accepted his evidence and that he was an expert. In these circumstances it would have been irrational for the Board to ignore his affidavit.

· Professor Barr's affidavit and the Akani judgment, (see paragraph 15 infra), relate to a specific type of EBTs. None of the parties, whether in written responses to Peermont's

objections at the hearing or in affidavits before this Court, ever disputes that the EBTs at issue in Jonoforce and Pioneer's licence

applications are the exact same ones that were in issue in the Akani matter and which are considered by Professor Barr. There is accordingly no dispute of fact before this Court on this issue.

· The National Policy, GRC Report and NGB Report are not admissible. The National Policy self-evidently reflects national gambling policy in relation to EBTs and is at least relevant to the main application to the extent that it demonstrates this. Moreover, the GRC Report is an official report prepared for the Minister of Trade and Industry which, on its face, represents the views of the Gambling Review Commission. The NGB report concerns EBTs and was published by the National Gambling Board, an important gambling regulatory authority. The GRC and NGB Reports were before the Board while the National Policy was referred to in Peermont's heads. The Board cannot responsibly not have been aware of it given that it is a national policy endorsed by Cabinet. The claim that any of these documents is not relevant is thus spurious.

· The RBB report is irrelevant and is based on unsustainable evidence in relation to the nature of conventional EBTs set out in the NGB Report and the GRC Report. The RBB report concerns the potential entrance of a similarly 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 or 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.

· The first RBB affidavit is not an affidavit for the purposes of Uniform Rule 6(1). Pioneer argues that the first RBB affidavit is impugnable as it is not initialed by the deponent or commissioner on each and every page and as the commissioner failed to provide certain details below her signature. Remarkably, all of the details Pioneer avers are missing are evident on the affidavit. The affidavit was notarised by a notary public of the United Kingdom as is permissible under Uniform Rule 63(2)(g). The fact that the notary bound the affidavit removed the need for an initial to be placed on each page. Richard Murgatroyd, the deponent of the first RBB affidavit, confirms its contents in the second RBB affidavit, which put paid to any merit that Pioneer's objection may have had.

I find that for the reasons advanced, that the application to strike out should be dismissed.

[10] The Fourth Respondent also brought a conditional counter – application seeking to stay the main application pending finalisation

of a review application it has brought to challenge the constitutionality of the Review Regulations. It was contended that the Review Regulations violate Sections 33 and 34 of the Constitution Act 108 of 1996 and the audi alteram partem principle. Pioneer submitted that this is the case because the Review Regulations do not permit it:

· the right to be heard in Peermont’s internal review application.

· to oppose the relief sought by Peermont and to deliver opposing affidavits;

· to appear before and present argument to the review tribunal.

· does not permit Peermont to join interested parties if it intends to do so.

[11] I am of the view that the Review Regulations does not deny an affected party the right to be heard during the internal review

process. This Court does not have a general power to grant a stay. An order to stay should only be granted in exceptional circumstances. In my view, it is not warranted in this case because the outcome of the contemplated review by Pioneer has no direct bearing on the main application in this matter and would unduly prejudice Peermont, if regard is had to the relief that is sought by Peermont in this application. It is not necessary for me to go into great detail in this regard, suffice to state that I am of the view that the intended review application by Pioneer lacks any prospect of success if regard is had to the provisions of Section 3 of the Promotion of Administrative Justice Act 3 of 2000 - (PAJA) which requires, amongst others, procedural fairness. An affected party has a right to make representations and be heard during the internal review process.

[12] The granting of a stay of the main application would be prejudicial to Peermont. There was no guarantee as to when this intended

application to stay would be heard and finalized. In the meantime Peermont would run the risk of having Jonoforce and Pioneer been

opened and operational, much to the detriment of Peermont, who would be left without a remedy. It would be better to preserve the status quo and not allow Jonoforce and Pioneer to open its doors, pending the finalization of the application for the review of the Review Regulations. It is for these reasons, amongst others, that I granted an order dismissing the counter- application to stay the main

application pending the finalization of the review application brought by the Fourth Respondent to challenge the constitutionality

of the Review Regulations.

[13] I also considered whether the Applicant has made out a case for the relief sought. The relief sought by the Applicant was for an interim interdict pending the final determination of internal review proceedings. The requirements for an interim interdict are:

(i) a prima facie right;

(ii) a well-grounded apprehension of irreparable harm if the interim relief is not granted;

(iii)that the balance of convenience favours the granting if the interim interdict;

(iv) there is no other satisfactory remedy available.

[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 it 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.

[15] 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 EBT’s, which entails automatic matching and not matching by the player. Peermont contended that this aspect the Board failed to consider. Suffice to state that convectional EBT’s are not bingo as defined in the North West Gambling Act. Bingo in the North West Gambling Act does not encompass conventional EBT’s. 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 v 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.

[16] Peermont will undoubtedly suffer irreparable harm of the interim relief is not granted and the ultimate relief is eventually granted. That Peermont will suffer significant financial lost is beyond question. No undertaking was given by either Jonoforce or Pioneer that it will not start operating pending the resolution of the internal review, as Latiano did.

[17] I have considered whether all the other requirements for an interim interdict have been met and I am satisfied that the Applicant indeed made out a case for the interim relief in the form of an interdict. I am satisfied that the balance of convenience favours the granting of the interim interdict and there is no other satisfactory remedy available to the Applicant. It is for the aforementioned reasons, inter alia, that I granted the order as contained in paragraph [1], supra.

___________________

R D HENDRICKS

JUDGE OF THE HIGH COURT

NORTH WEST DIVISION, MAHIKENG