Aquatur (Pty) Ltd v Sacks and Others

• Jurisdiction: South Africa
• Citation: 1989 (1) SA 56 (A)

Aquatur (Pty) Ltd v Sacks and Others
1989 (1) SA 56 (A)

1989 (1) SA p56

Citation	1989 (1) SA 56 (A)
Court	Appellate Division
Judge	Corbett JA, Hoexter JA, Vivier JA, Steyn JA, Nicholas AJA
Heard	May 23, 1988
Judgment	September 1, 1988

Flynote : Sleutelwoorde E

Intoxicating liquor — Licences and authorities — Nature of — Liquor licence is a statutory privilege granted to a particular person under the liquor laws to sell liquor at particular premises — Granting thereof involves exercise by licensing authorities of a F delectus personae-Licensee cannot transfer or deal with licence unless authorised thereto in terms of the Liquor Act 87 of 1977 — Courts nevertheless have recognised contractual obligations providing for transfer of liquor licence by tenant to landlord at determination of lease of premises where licence held by tenant and have ordered specific performance thereof.

G Intoxicating liquor — Licences and authorities — Off-consumption licence — Owner of hotel business conducted under hotel liquor licence leasing property to fourth respondent — Fourth respondent subletting to appellant — Authority to sell liquor for off-consumption granted subsequently — Clause in lease providing that 'the tenant H acknowledges that the hotel liquor licence held by the tenant... is the property of the landlord... and upon expiry... of this lease shall cause the then current hotel liquor licence to be transferred into the name of the landlord or his nominee' — Appellant during currency of sublease applying in terms of s 34(1)(b) of the Liquor Act 87 of 1977 I for cancellation of the authority to sell liquor for consumption off the premises and the grant of a liquor store licence — Lease and sublease terminated by effluxion of time — Appellant, relying on s 191(a) of Act, refusing to transfer hotel liquor licence or liquor store licence — Section 191(a) not applicable to contractual provisions which oblige the lessee to transfer a liquor licence to the lessor — Clear from contractual obligation that parties contemplated that what had to J be returned was substantially

1989 (1) SA p57

A the same liquor licence, possessed of the same rights and privileges as before — Legislature intending that the liquor store licence issued in terms of s 34(1)(b) was to replace previous off-sales authority so that once conversion effected there was no longer room for the privilege to obtain authority under s 87(1)(a) to sell liquor B for off-consumption — Court finding that, by returning the hotel liquor licence without the liquor store licence, appellant would not have returned that which it had received — By transferring the liquor store licence appellant would have performed substantially what it undertook to do in its sublease — Specific performance granted — Confirmed on appeal.

C Specific performance — Clause in lease of hotel premises providing for transfer of liquor licence by tenant to landlord on termination of lease of premises where licence held — Section 191(a) of Liquor Act 87 of 1977 not applicable to such contractual obligations — Courts have recognised such contractual obligations and have ordered specific performance thereof. D

Headnote : Kopnota

A liquor licence is a purely personal statutory privilege granted to a particular person under the liquor laws to sell liquor at particular premises. Its grant involves the exercise by the licensing authorities of a delectus personae so that the licensee cannot transfer or otherwise deal with the licence unless authorised thereto in terms of the Liquor Act 87 of 1977, which provides for the strict supervision of the E grant, transfer and removal of licences. Nevertheless, our Courts have recognised contractual obligations such as a provision in a lease that a liquor licence held by a tenant is the property of the landlord and that upon determination of the lease the tenant shall cause the licence to be transferred to the landlord or his nominee, and have ordered specific performance thereof.

The first three respondents were joint owners of a property on which a hotel business was conducted under a hotel liquor licence. F Their predecessor had let the property to fourth respondent who in turn had sublet it to appellant in May 1981. The main lease was amended and extended to 31 March 1986 with no further right of renewal. At all relevant times there had been a hotel liquor licence. When the main lease had been concluded in 1965 authority to sell liquor for off-consumption had not been applied for. Subsequently, but prior to the sale of the hotel business by fourth respondent to the appellant, authority to sell liquor for off-consumption was granted and the off-sales business was established at Market Street, Krugersdorp. G The deed of sale concluded by fourth respondent and appellant recorded that the seller intended moving the off-sales business to Percy Stewart Street and that such a removal was a condition of the sale. Certain clauses of the main lease were incorporated into the sublease as if fourth respondent were the landlord and appellant the tenant. Clause 11 provided that 'the tenant acknowledges that the hotel liquor licence held by the tenant... is the property of the landlord... and H upon expiry... of this lease shall cause the then current hotel liquor licence to be transferred into the name of the landlord or his nominee'. Similar provisions were contained in the agreement of sale of the hotel business concluded between fourth respondent and appellant. Appellant had, during the currency of its sublease, applied in terms of s 34(1)(b) of the Liquor Act 87 of 1977 for cancellation of the authority to sell liquor for consumption off the hotel premises and for the grant of a liquor store licence instead. The main lease and sublease I terminated. Appellant refused to take steps to transfer either the hotel liquor licence or the liquor store licence. Respondent applied to Court for an order that the hotel liquor licence and liquor store licence be transferred to the first three respondents or their nominee. It was contended that appellant was expressly bound to take steps to transfer the hotel liquor licence to fourth respondent and that it was a tacit term of the lease that the liquor store licence should be transferred to fourth respondent, who was contractually bound to transfer the J licences to the first three respondents or their

1989 (1) SA p58

A nominee. Appellant contended (1) that it was not bound to transfer either licence; (2) that such contractual obligation was void in terms of s 191(a) of the Act; (3) with regard to the liquor store licence, each time the off-sales moved to new premises a new off-sales authority was required which meant the off-sales had been abandoned and a new off-sales privilege had been granted before appellant applied under s 34(1)(b) of the Act for the liquor store licence. The Court a quo upheld B respondent's contentions in regard to appellant's contractual obligations and dismissed the defences raised by the appellant. Appellant appealed against the order for the transfer of the liquor store licence. On appeal it was contended that the appellant's contractual obligation would amount to a purported relinquishment of its rights under the Act to transfer the licence to any other person and would be void in terms of s 191(a) of the Act.

Held, that s 191(a) of Act 87 of 1977 did not apply to contractual provisions such as those in the present case which obliged the lessee C in certain circumstances to transfer a liquor licence to the lessor.

Held, further, that clause 11 of the main lease, incorporated by reference into the sublease, required the appellant upon termination of the lease to 'cause the then current hotel liquor licence to be transferred into the name of the landlord or his nominee'.

Held, further, that it was clear from the contractual obligation D in question that the parties contemplated that what had to be returned at the termination of the lease was substantially the same hotel liquor licence, possessed of the same rights and privileges as before: in order to determine whether the return of only the hotel liquor licence measured up to that obligation the substance of the licence which was returned and not merely its form had to be considered; and one of the special privileges which attached to the hotel liquor licence when it was transferred into the appellant's name was the right to apply for E and acquire authority under s 87(1)(a) of the Act to sell liquor for off-consumption.

Held, further, that it seemed clear that the Legislature intended the liquor store licence which was issued in terms of s 34(1)(b) to replace the previously existing off-sales authority so that, once the conversion has been effected, there was no longer any room for the privilege to obtain authority under s 87(1)(a) of the Act to sell liquor for off-consumption.

F Held, further, that, if the hotel liquor licence was returned without the liquor licence, the appellant would not have returned that which it had received and which it had undertaken to restore, namely the hotel liquor licence in its original form, together with all the rights and privileges attaching to it, in particular the privilege to obtain authority under s 87(1)(a) of the Act to sell liquor for off-consumption.

Held, further, that by effecting transfer of the liquor store licence appellant would have performed substantially what it undertook to do in the sublease.

G Held, therefore, that the appellant was able to perform specifically its obligations under the sublease by effecting transfer of both the hotel and liquor store licences and there was no equitable reason to deny the respondents the right to specific performance which they had in our law. Appeal dismissed.

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