American Palace v Minister of Safety and Security and Others

• Jurisdiction: South Africa
• Judge: Friedman JP
• Judgment Date: 08 June 2000
• Citation: 2000 (4) SA 88 (BH)
• Docket Number: 219/2000
• Counsel: J P De Bruin SC (with him N Jagga) for the applicant. P C van der Byl SC (with him O K Chwaro) for the respondents.
• Court: Bophuthatswana High Court

Friedman JP:

A. The factual background

The applicant is a firm owned by a certain C Papachristoforou which G carried on gambling operations in Mafikeng.

The said premises were equipped with slot machines, approximately 50 in number. To add to the ambience, and an escalation of the intensity of sound, a high fidelity sound system was installed by the applicant.

Prior to 14 April 2000 an exchange of correspondence took place H between the applicant and certain of the respondents as follows:

(i)

On 31 January 2000 a letter was addressed to the second respondent by Van de Wall and Partners, the attorney acting for the applicant, to the effect that the applicant had been notified by the South African Police Services to close his gambling operations on or I before 31 January 2000. Because of pending legal issues a request was directed to the second respondent, by the said attorneys, for an urgent meeting to discuss the matter. This letter is GSR6 of the papers.

(ii)

A letter dated 31 January 2000 was addressed to Superintendent Steyn of the legal services of the said South African Police J

Friedman JP

Services by the applicant's attorney, enclosing the letter referred to in (i) above, and asserting that, inasmuch as the matter A was pending, the applicant would continue with its gambling operations. The letter is GSR7 of the papers.

(iii)

In the letter dated 9 February 2000 (GSR8) the chief executive officer of the North West Casino, Gaming and Betting Board B (hereafter referred to as the Board) wrote to the applicant's attorney informing them that Mrs E Molewa, the second respondent, declined to meet with the said attorney or the applicant and added that there should be no interference with the operation of the police in regard to their combatting of illegal gambling activities in the North West Province. C

(iv)

The applicant's attorney wrote to the said Steyn by letter dated 15 February 2000 (GSR9), confirming that the applicant was willing to close down its operations and required further information in regard to other gambling operations in the province.

(v)

In GSR10 of the papers, dated 18 February 2000, the South D African Police Services replied to the applicant's attorney, and this letter is quoted in full:

'18 February 2000

Van der Wall Attorneys

P O Box 294

Kimberley

8300

Closure of illegal E gambling operations

Your letter Mr Honiball/lg dated 18 February 2000 refers.

It is hereby confirmed that you undertook to instruct your clients to immediately close their operations down.

You are informed that not only your clients but F all illegal gambling operators were instructed to cease their gambling operations.

The SAPS also share the opinion that the "interdict" obtained by Hotel Slots is not in force anymore. The attorneys acting on behalf of Hotel Slots were informed accordingly and there is no difference between the SAPS's approach to your clients and Hotel Slots.

Hotel Slots were also instructed to cease their G gambling operations.

You are further advised that numerous gambling machines and other property were seized from various operations by the SAPS in the recent past.

You may rest assured that the SAPS will act against all illegal gambling operations within North West Province.

Yours faithfully' H

(vi)

The applicant's attorney stated in a letter to the second respondent, dated 3 March 2000, certain legal contentions which formed the gravamen of the applicant's legal submissions, which will I be considered later herein. The said letter also contained a suggestion calling for an amicable resolution of the issue. Annexure A2.

(vii)

In a letter dated 10 April 2000, the applicant's attorney wrote to the said Steyn informing him that, based on legal authority, the view was that the provisions of s 54 of the North West Casino, J

Friedman JP

Gaming and Betting Act 13 of 1994, as amended (hereafter A referred to as 'the Act'), did not apply.

On 14 April 2000 the fifth respondent, who on 17 February 1999 had been appointed as head of law enforcement of the Board, together with certain members of the South African Police Services, namely Inspector G S Ramogoa and Sergeants Thwane and Letlonkane, went to the applicant's premises. The said Letlonkane entered the premises B and cashed a marked R100 note for 50 cent coins and proceeded to one of the gaming machines, where he fed the 50 cent coins into a machine and received approximately 50 x 50 cent coins based on a certain permutation of numbers.

At the time there were approximately 14 other persons operating the C gaming machines in the said premises.

The fifth respondent, who is described as a 'large person', blocked the entrance. A raid by the South African Police Services occurred, in consequence of which the R100 note was retrieved, as well as an amount of cash of R27 699,45, which was counted on the premises, and 50 D gaming machines were also seized by the police.

There are conflicting versions of how the police raid was conducted and what precisely occurred on the premises. It is not necessary to resolve the aforesaid disputes. It is, however, not in dispute that a police raid occurred on 14 April 2000 on the appellant's premises and that the said sum of money and machines were attached by the E police.

A substantial issue between the parties is whether the activities carried on at the said premises required to be licensed and whether they were lawful or unlawful in terms of the said Act.

The applicant thereafter launched an urgent application to this Court for an order, inter alia: F

'2.

That, pending the finalisation of the relief sought in para 2 of this notice of motion, interim relief be granted to the applicant, whereby the first respondent, the second respondent and the fifth respondent and members of the South African Police Services in the employ of the first respondent are prohibited from interfering in G any manner or from acting against the applicant thus preventing the applicant from conducting his business at 23 Warren Street, Mafikeng.

3.

An order instructing the first respondent and the fifth respondent to forthwith surrender the property and money seized from the applicant on 14 April 2000, at its premises at 23 Warren H Street, Mafikeng, to the applicant.

4.

An order which declares that s 54 of the North West Casino, Gaming and Betting Act 13 of 1994 does not apply to operations as the one conducted by the applicant.

5.

An order in terms of ss 169 and 172 of the Constitution of the I Republic of South Africa Act 108 of 1996 declaring the following sections of the North West Casino, Gaming and Betting Act 13 of 1994 unconstitutional insofar as it relates to the operation of gaming machines without a licence:

(a)

s 34;

(b)

s 52; J

Friedman JP

(c)

s 54; A

(d)

s 85(1)(a);

and that, if the Court does declare the said sections unconstitutional, it also grants temporary relief as contemplated by s 172(2)(b) of the said Constitution Act.

6.

That the respondents who oppose this application be ordered to pay the costs thereof, jointly and severally, in the event of the B one paying, the others being absolved.'

B. The submissions

Mr De Bruin, and Mr Jagga (in reply), submitted on behalf of the applicants that: C

(a)

Germane to proper interpretation of s 54 of the Act is the definition of 'game of chance'. Game of chance is defined as including a lottery, a lotto, a number game, a scratch game, gambling or wagering, or any similar game of chance or activity mentioned in D this Act or elsewhere but does not include any game conducted in a casino. (The emphasis is mine.)Therefore it was submitted that the said definition of 'game of chance' expressly excludes any game conducted in a casino as a game of chance. Put another way if the E act complained of relates to a game conducted in a casino it cannot be a 'game of chance' for the purposes of the Act. Therefore, having regard to the fact that the applicant had gaming machines and that a casino also has them, s 54 of the Act cannot and does not apply to the operations conducted by the applicant.

(b)

Section 34 which reads as follows: F

'34. Penalty for failure to take out a licence

Any person who operates a casino or gaming machine without being in possession of a licence or fails to pay the licence or fees contemplated in s 28 as required by those sections shall be guilty of an offence and liable on conviction to a fine not exceeding R250 000 or to imprisonment for a period not exceeding five years or to both such fine and such imprisonment.' G

Counsel for the applicant contended that s 34 likewise did not apply to the activities and business of the applicant, in that the definition of a casino makes it clear that it is business premises upon which gambling is conducted under a casino licence. Therefore its own H business premises which did not have a licence for gaming was not a casino. Therefore it was contended that what s 34 in essence prohibits is gaming on business premises without a casino licence. It was submitted that s 34 could not be of application to any gaming machine used outside a casino and consequently the mere presence of a number of I gaming machines on premises does not establish or constitute these premises as a casino. Therefore the argument continued that the judgment of Mogoeng J in this respect in the case of Hotel Slots (Pty) Ltd v Premier of the North West Province (case No 1187/97, unreported) was incorrect. This aspect will be dealt with later herein. J

Friedman JP

(c)

After analysing the Act, counsel for the applicant concluded that the Act revealed the following position; that A s 52(1)(f), which reads as follows:

'52(1) Any person desiring to -

(f)

operate gaming machines on a premises...