Vukani Gaming Free State (Pty) Ltd v Purple Dot Investments 34 (Pty) Ltd and Others (A108/2019) [2020] ZAFSHC 75 (26 March 2020)

IN THE HIGH COURT OF SOUTH AFRICA,

FREE STATE DIVISION, BLOEMFONTEIN

Appeal Case number: A108/2019

Case number: 1064/2018

In the matter between:

VUKANI GAMING FREE STATE (PTY) LTD

Appellant

and

PURPLE DOT INVESTMENTS 34 (PTY) LTD

1st Respondent

INTERNET LOUNGE / CAFÉ

2nd Respondent

FREE STATE GAMBLING AND LIQUOR

AUTHORITY

3rd Respondent

CORAM: DAFFUE, ADJP et MBHELE, J et CHESIWE, J

HEARD ON: 23 MARCH 2020

JUDGMENT BY: DAFFUE, ADJP

DELIVERED ON: 26 MARCH 2020

I INTRODUCTION

[1] The appellant in this appeal was the unsuccessful applicant in the court a quo. It unsuccessfully applied for an interdict in terms whereof the owner of certain premises be interdicted and restrained from permitting the use of its premises for the purposes of restricted gambling activities and unlawful gambling as prohibited by the National Gambling Act 7 of 2004 and the Free State Gambling and Liquor Authority Act 6 of 2010. It also unsuccessfully sought an order against the tenant, interdicting and restraining it from conducting business as set out above from the premises. On 20 September 2018 Hefer, AJ dismissed the application against the landlord as first respondent and the business as second respondent with costs.

[2] Appellant applied for leave to appeal. On 3 June 2019 Van Zyl, J, who heard the application in the absence of Hefer, AJ whose acting stint had come to an end, granted leave to appeal to the full bench of this division. Leave to appeal was only granted insofar as the judgment and orders pertaining to the second respondent are concerned. Leave to appeal in respect of first respondent, the landlord, was refused.

II THE PARTIES

[3] The appellant is Vukani Gaming Free State (Pty) Ltd, a company which has its principal place of business in Midrand, Gauteng. It is the holder of a Gaming Machine Operator Licence (also referred to as a “route operator licence”) for the Free State Province. The licence permits it to offer for play 1000 Limited Pay-out Machines (LPM’s) in the Free State at sites approved and licensed for this purpose by the Free State Gambling and Liquor Authority (“the Authority”). Appellant was represented by Advv P Ellis SC and AP Ellis.

[4] The second respondent in the court a quo and only respondent in this appeal is Internet Lounge/Café, a firm/partnership that previously conducted business as an alleged internet café/lounge from Shop 34, Ibis Building, 32B Warden Street, Harrismith, Free State Province (“the premises”). The second respondent was represented by Adv N Jagga. I shall herein later refer to second respondent as “the respondent.”

III THE RELIEF SOUGHT AND DISMISSED BY THE COURT A QUO

[5] Appellant sought the following relief in its notice of motion and I only quote the paragraphs applicable to the second respondent and the premises:

“1. That the First Respondent:

1.1 be interdicted and restrained from permitting the use of its premises situate at SHOP 34, IBIS BUILDING, 32B WARDEN STREET, HARRISMITH, FREE STATE PROVINCE (“the premises”) for the purposes of restricted gambling activities and unlawful gambling as prohibited by the National Gambling Act 7 of 2004, and the Free State Gambling and Liquor Authority Act, Act 6 of 2010;

1.2 …..;

1.3 …..

2. That the Second Respondent, and all persons occupying the premises by, through or on behalf of the Second Respondent are interdicted and restrained from:-

2.1 conducting any restricted gambling activity, unlawful gambling activity and engaging in any other conduct connected with unlawful

gambling activity prohibited by the National Gambling Act 7 of 2004 and the Free State Gambling and Liquor Authority Act 6 of 2010;

2.2 permitting or allowing gambling as defined in section 1 of the National Gambling Act 7 of 2004 and the Free State Gambling and Liquor Authority Act 6 of 2010 on and from the premises.

3. The First and Second Respondents are directed to pay the costs of this application, jointly and severally, the one paying the other to be absolved, on the scale as between attorney and client.” (emphasis added)

IV GROUNDS OF APPEAL

[6] Appellant relies upon the following grounds of appeal, to wit:

6.1 that the court a quo misconstrued the applicable test pertaining to locus standi insofar as it found that appellant had locus standi to a limited extent only;

6.2 the court a quo erred in finding that appellant had an appropriate alternative remedy.

V APPLICATION TO LEAD FURTHER EVIDENCE

[7] Leave to appeal having been granted, the appeal was set down for hearing on 11 November 2019. A few days before the hearing

respondent served and filed an application for leave to admit new evidence. Appellant filed its answering affidavit on 7 November 2019 to which respondent replied with a replying affidavit filed on the day before the appeal hearing. Respondent’s counsel filed heads of argument dealing with the aspects raised in this application, but appellant’s counsel (whose heads in respect of the appeal was already filed by 18 October 2019 in terms of the practice directives of this court), failed to file additional heads pertaining to the application for leave to admit new evidence. Consequently, on 11 November 2019 and at the request of appellant’s counsel, the matter was postponed to 23 March 2020, costs to be costs in the appeal.

[8] The test for the admissibility of further evidence on appeal is well established and the locus classicus in this regard is S v De Jager.[1] More recently the Supreme Court of Appeal dealt with the matter as follows and I quote from St Clair Moor and another v Tongaat-Hulett Pension Fund and others[2]:

“[36] The test for the admissibility of further evidence on appeal is well-established (S v de Jager 1965 (2) SA 612 (A) at 613C – D). An applicant must meet the following requirements:

(a) there must be a reasonably sufficient explanation, based on allegations which may be true, why the new evidence was not led in the court a quo;

(b) there should be a prima facie likelihood of the truth of the new evidence; and

(c) the evidence should be materially relevant to the outcome of the case.

Further evidence is allowed only in exceptional cases (De Aguiar v Real People Housing (Pty) Ltd [2010] ZASCA 67 2011 (1) SA 16 (SCA) para 11).”

[9] The authorities are clear. Leave will be granted for new evidence to be adduced in exceptional cases only. The Supreme

Court of Appeal stated the following in De Aguair v Real People Housing (Pty) Ltd[3]:

“11. It is incumbent upon an applicant for leave to adduce further evidence to satisfy the court that it was not owing to any remissness or negligence on his or her part that the evidence in question was not adduced at the trial. Furthermore, inadequate presentation of the litigant’s case at the trial will only in the rarest instances be remediable by the adduction of further evidence at the appeal stage. It is thus clear that the test is a stringent one.” (emphasis added)

[10] In my view it was uncalled for to apply for leave to admit new evidence. Firstly, the application does not meet the requirements set out in the previous two paragraphs. A court of appeal decides whether the judgment appealed from is right or wrong according to the facts in existence at the time it was given and not according to new circumstances which came into existence afterwards. This has been confirmed as a general rule in Weber-Stephen Products Company v Alrite Engineering (Pty) Ltd.[4] The court of appeal does have a discretion whether or not to allow a case to be re-opened to receive evidence of facts which only came into existence after the judgment appealed against was given if these are material to the facts which existed at the time of the judgment as stated by Comrie, J in Van Eeden v Van Eeden.[5] The circumstances must be very special.

[11] In my view the fact that the respondent vacated the premises a few days before the hearing of the appeal in November 2019, more than a year after the judgment of the court a quo and four months after leave to appeal was granted, could have been brought to the attention of the registrar of this court by way of a simple affidavit or even by correspondence between the parties confirming the relevant fact. In casu, appellant never tried to deny the allegation that respondent had vacated the premises, but merely reserved the right to argue that the appeal did not become moot, alternatively if held to be moot, that it was still entitled to an order that the appeal be upheld. As matters materialised, appellant not only responded to the application for leave to admit new evidence, but dealt with other aspects which in my view are totally irrelevant and could never have been considered on appeal. Having concluded that respondent’s application stands to be dismissed for failing to comply with the requirements and suggesting what should have been presented to the court of appeal, the further aspect to be considered is the issue of mootness.

VI MOOTNESS & NO PRACTICAL EFFECT

[12] In order to understand the submissions pertaining to mootness and no practical effect or result, it is important to consider the case which appellant brought to the court a quo for adjudication. Appellant did not express any fear that respondent might be relocating to other premises within the court’s jurisdiction in order to continue with its illegal activities. The following extracts from the founding affidavit containing the evidence relied upon by the appellant to make out a case for an interdict are relevant and should be read with the notice of motion:

12.1 Paragraph 2: “This is an application for an interdict preventing the illegal use of the premises situated at Internet Lounge / Café – Shop 34, IBIS Building…. (“the unlicensed premises”)”.

12.2 Paragraph 3: “The unlicensed premises are... occupied by the Second Respondent. The unlicensed premises purport to be running as an internet café / lounge whereas, in truth, it is used for the purpose of illegal gambling.”

12.3 Paragraph 5: “The Applicant accordingly approaches this Honourable Court for an interdict to prevent the continued illegal use of the unlicensed premises.”

12.4 Paragraph 8.1: “The Second Respondent is… carrying on business from the unlicensed premises.”

12.5 Paragraph 33: “Consequently, the Applicant enlisted the assistance of investigators… to attend the unlicensed premises…”

12.6 Paragraph 33.5: “The investigators are convinced that illegal gambling is taking place at the unlicensed premises.”

12.7 Paragraph 51.2: “As explained above, the Applicant has a right to carry on its lawful businesses without unlawful interference. The premises lie within the catchment area from which many of the patrons of the licenced premises live and work.”

12.8 Paragraph 51.3: “As the games being offered by the Second Respondent at its illegal establishment are similar to those offered by the applicant…”

[13] Section 16(2)(a)[6] reads as follows:

“(2) (a) (i) When at the hearing of an appeal the issues are of such a nature that the decision sought will have no practical effect or result, the appeal may be dismissed on this ground alone.

(ii) Save under exceptional circumstances, the question whether the decision would have no practical effect or result is to be determined without reference to any consideration of costs.”

[14] Several judgments of the Supreme Court of Appeal and the Constitutional Court are applicable pertaining to mootness.

Some of these have been decided prior to the commencement of the Superior Courts Act[7], but these are still applicable. The test is whether the judgment or order will have a practical effect and not if it might be of importance in a hypothetically future case. Wallis, JA expressed himself in no uncertain terms in Minister of Justice v Estate Stransham-Ford[8].

[15] Jafta, J dealt with the issue as follows in Popcru v Sacoswu and others[9]:

“[64] …. As is evident from the first judgment, the real dispute between the parties centred around the interpretation each party gave to ss 18 and 20.…

[65] Therefore, at the heart of the dispute lies the correct meaning of ss 18 and 20. That meaning may be determined only through the interpretation of those provisions....

[67] ….Moreover, the meaning to be assigned to ss 18 and 20 is not restricted to the present dispute which has become moot. It will extend to all cases where these provisions find application. Therefore, I disagree with the conclusion implicitly reached in the first judgment that the determination of the merits here will have no practical effect on future disputes between other parties.

[81] Courts have entertained moot appeals in order to correct wrong statements of law in the judgments against which an appeal was brought. In AAA Investments this Court held:

“The issues may well be moot. Nonetheless, there are two conflicting judgments on these issues and, if we do not consider this aspect of the case, the judgment of the SCA with all its implications for future regulation would remain binding. In all the circumstances, I would hold that these issues are so crucial to important aspects of government as well as the rights contained in the Bill of Rights that it is in the interests of justice to grant leave to appeal. Neither the judgment of the Supreme Court of Appeal nor that of the High Court can be said to be unassailable.”” (emphasis added)

VII LOCUS STANDI

[16] In Tavakoli and another v Bantry Hills (Pty) Ltd[10] the Supreme Court of Appeal held as follows:

“[13] Plasket AJA observed that Grosskopf J’s remarks in BEF were a specific application of the broader principle enunciated in Patz v Greene and Co 1907 TS 427 and summarised in Roodepoort-Maraisburg Town Council v Eastern Properties (Pty) Ltd 1933 AD 87 at 96, viz that where the lawmaker has prohibited the doing of an act in the interest of a person or class of persons, such

person may enforce the prohibition ‘without proof of special damage’. The corollary is that if the prohibition has been enacted in the public interest generally, a litigant must prove that the violation of the prohibition has caused him damage. As Grosskopf J said in BEF, a township restriction may be imposed for the benefit of a specific class and also for the benefit of the public in general (400H). In such a case the standing of persons in the specific class does not depend on proof of damage whereas the standing of other persons

does.”

[17] The court a quo accepted that appellant had locus standi on limited grounds only. It is not necessary to consider the issue in light of the conclusions arrived at in this judgment.

VIII NO ALTERNATIVE REMEDY

[18] The alternative remedy available must be a legal remedy, i.e. one that a court can grant, and if required, enforce. The existence of an alternative remedy will prevent the court from

granting an interdict if such proposed alternative will afford the applicant similar protection against the unlawful conduct causing the injury. This has been clearly explained in Hotz & Others v University of Cape Town.[11]

[19] In V & A Waterfront Properties (Pty) Ltd & another v Helicopter & Marine Services (Pty) Ltd[12] the Supreme Court of Appeal explained the requirement of an alternative remedy in further detail as follows:

“[23] Coming to the third and final requirement, the respondents submitted that an interdict was not the only appropriate remedy. It was said that the first appellant could sue for damages or cancel the lease. This argument cannot prevail. The first appellant is entitled to enforce its bargain: to obtain the lessee’s promised rental while preventing the latter from conducting itself in a manner that involves breaking the law. The only ordinary remedy which provides it with the necessary protection is an interdict.”

[20] In light of the conclusions arrived at in this judgment, it is also not necessary to adjudicate this issue notwithstanding the interesting submissions made on behalf of the parties. The Hefer judgment does not fall in the category of matters mentioned in Popcru supra.[13] Tefo, J[14] has recently come to a different conclusion based on similar facts. There can be no fear that other courts would have to follow the Hefer judgment based on the stare decisis principle. Our jurisprudence is crystal clear if the Hotz and V&A Waterfront judgments are duly considered. Mr Ellis referred us to Centre for Child Life v Hoërskool, Fochville and another[15] in support of his argument that notwithstanding mootness, the appeal should be adjudicated on the merits thereof. In that case the Supreme Court of appeal held that although its judgment would not have a practical effect on the parties before it, the interpretation of Uniform Rule of Court 35(12) was important and would affect future litigants. The experiences of children were contained in questionnaires and these documents were required to be discovered in terms of the rule. The court considered the rights of children guaranteed in terms of s 28(2) of the Constitution in order to arrive at its conclusion. In my view this judgment is distinguishable and does not support the appellant’s case at all.

IX COSTS

[21] In John Walker Pools v Consolidated Aone Trade & Invest 6 (Pty) Ltd (in liquidation) and another[16] the Supreme Court of Appeal explained the principles to be applied when a court exercises its discretion to award costs where a matter has become moot in the following words:

“[10] The remaining question is what to do about the costs of the application in this court. Where an appeal or proposed appeal has

become moot by the time leave to appeal is first sought, it will generally be appropriate to order the appellant or would-be appellant

to pay costs, since the proposed appeal was stillborn from the outset. Different considerations apply where the appeal or proposed

appeal becomes moot at a later time. The appellant or would-be appellant may consider that the appeal had good merits and that it should not be mulcted in costs for the period up to the date on which the appeal became moot. The other party may hold a different view. As a general rule, litigants and their legal representatives are under a duty, where an appeal or proposed appeal becomes moot during the pendency of appellate proceedings, to contribute to the efficient use of judicial resources by making sensible proposals so that an appellate court’s intervention is not needed. If a reasonable proposal by one of the litigants is rejected by the other, this would play an important part in the appropriate costs order. Apart from taking a realistic view on prospects of success, litigants should take into account, among other factors, the extent of the costs already incurred; the additional costs that will be incurred if the appellate proceedings are not promptly terminated; the size of the appeal record; and the likely time it would take an appellate court to form a view on the merits of the moot appeal. There must be a proper sense of proportion when incurring costs and calling upon judicial resources.” (emphasis added)

[22] The parties and respondent in particular did not heed to the warning of the Supreme Court of Appeal in John Walker Pools. They could have dealt with the issue in a much more appropriate manner to ensure that the matter was finalised on the previous

occasion in November 2019.

X CONCLUSIONS

[23] There was no need to apply for leave to admit new evidence and as shown supra[17] respondent failed to comply with the requirements for a successful application.

[24] The appeal should be struck from the roll without considering the merits as it will have no practical effect or result. The matter has become moot when respondent vacated the premises.

[25] The only issue that remains is the costs incurred. Insofar as the application for leave to admit new evidence is concerned,

respondent as the unsuccessful party shall bear those costs. Insofar as the appeal stands to be struck from the roll, the general rule is that appellant shall be ordered to pay the costs of the appeal, subject to what was held in John Walker Pools.[18] In exercising my discretion I am of the view that respondent should be penalised for the manner in which it elected to litigate.

This matter could and should have been finalised on 11 November 2019. On that day the court ordered that costs shall be costs

in the appeal. Consequently, appellant should be ordered to pay only 50% of respondent’s costs of the appeal.

XI ORDERS

[26] The following orders are granted:

1. The second respondent’s application for leave to admit new evidence is dismissed with costs.

2. The appeal is struck from the roll.

3. The appellant shall pay 50% of the second respondent’s costs of the appeal.

_________________

J P DAFFUE, ADJP

I concur

N M MBHELE, J

S CHESIWE, J

On behalf of Appellant: Adv P Ellis SC assisted by

Adv A P Ellis

Instructed by: ROSSOUWS ATTORNEYS

BLOEMFONTEIN

On behalf of 2nd Respondent: Adv N Jagga

Instructed by: VARDAKOS ATTORNEYS

VEREENIGING

[1] 1965 (2) SA 612 (A) at 613 C - D

[2] 2009 (3) SA 465 (SCA) at para 36

[3] 2011 (1) SA 16 (SCA) para 11

[4] [1992] ZASCA 2; 1992 (2) SA 489 (A) at 507

[5] 1999 (2) SA 448 (CPD) at 454 D – E, approved in Rail Commuters Action Group v Transnet Ltd t/a Metrorail [2004] ZACC 20; 2005 (2) SA 359 (CC) at 388 F – 389 A: see also in general Cilliers et al, Herbstein & Van Winsen: The Civil Practice of the High Court of South Africa, 5th ed, vol 2 pp 1240 – 1245 and Van Loggerenberg, Erasmus: Superior Court Practice, 2nd ed at A2 69 – 72, dealing with the powers of the court on the hearing of appeals as set out in s 19 of the Superior Courts Act, 10 of 2013

[6] Of the Superior Courts Act, 10 of 2013

[7] 10 of 2013; and see inter alia Premier, Provinsie Mpumalanga v Groblersdalse Stadsraad 1998 (2) SA 1136 (SCA) at 1141 D-F

[8] 2017 (3) SA 152 (SCA) paras 17 – 27

[9] 2019 (1) SA 73 (CC) paras 64, 65, 67 & 81; and see also the most recent judgment: President of the Republic of South Africa v Democratic Alliance & others 2020 (1) SA 428 (CC) paras 26 – 28 & 36

[10] 2019 (3) SA 163 (SCA) para 13

[11] 2017 (2) SA 485 (SCA) para 36

[12] 2006 (1) SA 252 (SCA) at para 23

[13] Paragraph 15 supra of this judgment

[14] Vukani Gaming Gauteng (Pty) Ltd v Parelio Foods CC, case no 45388/2017 & two similar matters, an unreported judgment of the Gauteng Division, Pretoria, delivered on 4 March 2020

[15] 2016 (2) SA 121 (SCA) paras 19, 25 – 27 & 29 -30

[16] 2018 (4) SA 433 (SCA) at para 10

[17] Paras 7 -11 supra

[18] Paragraph 21 supra