Phumelela Gaming and Leisure Ltd v Gründlingh and Others

• Jurisdiction: South Africa
• Citation: 2007 (6) SA 350 (CC)

Phumelela Gaming and Leisure Ltd v Gründlingh and Others [*]
2007 (6) SA 350 (CC)

2007 (6) SA p350

Citation	2007 (6) SA 350 (CC)
Case No	CCT31/05
Court	Constitutional Court
Judge	Langa CJ, Moseneke DCJ, Mokgoro J, O'Regan J, Sachs J, Skweyiya J, Van Der Westhuizen J and Yacoob J
Heard	November 15, 2005
Judgment	May 18, 2006
Counsel	D N Unterhalter SC (with J M Heher, J A Cassette and A G Gotz) for the applicant; G J Marcus SC (with A P H Cockerell) for the first and second respondents; S V Notshe SC for the fourth respondent

Flynote : Sleutelwoorde B

Trade and competition — Competition — Whether principles of market competition constitutionally recognised — Principles not specifically promoted — However, right to freedom of trade in s 22 consistent with competitive trade regime and recognising that C protection of competition in public interest.

Constitutional law — Human rights — Right to freedom of trade — Section 22 of Constitution consistent with competitive regime in matters of trade and recognising that protection of competition in public interest. D

Constitutional law — Human rights — Right to property — Ambit of — Section 25 of Constitution not absolute — Other rights and values to be recognised — Not immunising every property owner from all competition.

Constitutional law — Common law — Development of — Duty of courts — High Courts and SCA to view development of common law in light of spirit, purport and objects of Bill of Rights — No court having discretion in this E regard — Section 39(2) to be borne in mind by courts engaged in applying open-textured normative rule such as wrongfulness or fairness to set of facts — Constitutional Court to develop common law when required.

Trade and competition — Competition — Unlawful competition — What constitutes — Bookmakers offering and accepting bets using totalisator's dividend F results — Bookmakers' conduct not amounting to unlawful competition with totalisator operator.

Headnote : Kopnota

The applicant, a company that operated totalisator betting, brought a delictual claim against certain bookmakers on the ground that the bookmakers were exploiting the applicant's dividend results in a manner that constituted unlawful competition. In an appeal to the CC G the applicant contended that the SCA should have determined the wrongfulness of the bookmakers' conduct by developing the common law of unlawful competition under s 39(2) of the Constitution. It contended that the legal convictions of the community should have been determined against the backdrop of the intellectual property protection afforded by s 25 of the Constitution. It had not raised H this issue in either the High Court or the SCA, so one of the preliminary issues in the appeal was whether it was in the interests of justice for leave to appeal to be granted on this issue. Should this be established, a further issue before the Court would be whether the common law should have been developed by the SCA.

Held, that the High Courts and the SCA should at all times view the development of the common law in light of the spirit, purport I and objects of the Bill of Rights. In this no court had a discretion. The initial question was not whether developing the common law through the prism of the Bill of

2007 (6) SA p351

Rights would bring about a different result, a court was simply obliged to develop the common law A in a manner that promoted the spirit, purport and objects of the Bill of Rights. The provisions of s 39(2) should always be borne in mind by these courts, and particularly so when the court was engaged with applying an open-textured normative rule such as wrongfulness or fairness. The Constitutional Court also bore the obligation to develop the common law when this was necessary. (Paragraphs [26] and [27] B at 360B - G.)

Held, further, that the majority judgment of the SCA did not expressly give consideration to the impact of the Bill of Rights in its determination of the legal convictions of the community, although it should not, however, be lightly assumed that the Court did not take this into account. (Paragraph [28] at 360G - H.) The application for leave to appeal had some merit and was granted. (Paragraph [40] at C 363G.)

Held, further, that s 25 was not absolute; should not be employed in a manner that ignores other rights and values; and could not possibly mean that it was the right of every property owner to be immunised from all competition. (Paragraph [38] at 363C.)

Held, further, that the promotion of the spirit, purport and objects of the Bill of Rights could not be confined to the impact of D s 25 of the Constitution alone, but had to include consideration of other provisions of the Bill of Rights which might be relevant to the issue, such as the right to freedom of trade. Although the Bill of Rights did not expressly promote competition principles, the right to freedom of trade enshrined in s 22 of the Constitution was consistent with a competitive regime in matters of trade and the recognition of E the protection of competition as being in the public welfare. (Paragraphs [35] and [36] at 362C - F.)

Held, accordingly, that the conclusion reached by the SCA (that the conduct of the bookmakers did not constitute unfair competition) could not be faulted. (Paragraph [42] at 363I - 364A.) Appeal dismissed. F

Cases Considered

Annotations

Reported cases

A Becker & Co (Pty) Ltd v Becker and Others 1981 (3) SA 406 (A): dictum at 417 applied

Aetiology Today CC t/a Somerset Schools v Van Aswegen and Another 1992 (1) SA 807 (W): dictum at 816 - 20 applied G

Atlas Organic Fertilizers (Pty) Ltd v Pikkewyn Ghwano (Pty) Ltd and Others 1981 (2) SA 173 (T): dictum at 188 - 9 applied

Bress Designs (Pty) Ltd v GY Lounge Suite Manufacturers (Pty) Ltd and Another 1991 (2) SA 455 (W): dictum at 473 and 475 - 6 applied

Bruce and Another v Fleecytex Johannesburg CC and Others 1998 (2) SA 1143 (CC) (1998 (4) BCLR 415): applied H

Brummer v Gorfil Brothers Investments (Pty) Ltd and Others 2000 (2) SA 837 (CC) (2000 (5) BCLR 465): dictum in para [3] applied

Carmichele v Minister of Safety and Security and Another (Centre for Applied Legal Studies Intervening) 2001 (4) SA 938 (CC) (2002 (1) SACR 79; 2001 (10) BCLR 995): dicta in paras [4], [39] - [40] and [54] - [56] applied I

De Reuck v Director of Public Prosecutions, Witwatersrand Local Division and Others 2004 (1) SA 406 (CC) (2003 (2) SACR 445; 2003 (12) BCLR 1333): dictum in para [3] applied

Elida Gibbs (Pty) Ltd v Colgate Palmolive (Pty) Ltd (1) 1988 (2) SA 350 (W): dictum at 356 - 7 applied J

2007 (6) SA p352

Franschhoekse Wynkelder (Ko-operatief) Bpk v South African Railways and Harbours 1981 (3) SA 36 (C): dictum at A 38 - 9 applied

Fraser v Naudé and Others 1999 (1) SA 1 (CC) (1998 (11) BCLR 1357): dictum in para [10] applied

Gründlingh and Others v Phumelela Gaming and Leisure Ltd 2005 (6) SA 502 (SCA) ([2005] 4 All SA 1): confirmed

K v Minister of Safety and Security 2005 (6) SA 419 (CC) (2005 (9) BCLR 835; 2005 (8) BLLR 749): dicta in paras B [17] and [18] applied

Lorimar Productions Inc and Others v Sterling Clothing Manufacturers (Pty) Ltd; Lorimar Productions Inc and Others v OK Hyperama Ltd and Others; Lorimar Productions Inc and Others v Dallas Restaurant 1981 (3) SA 1129 (T): applied

Matthews and Others v Young 1922 AD 492: dictum at 507 applied C

Member of the Executive Council for Development Planning and Local Government, Gauteng v Democratic Party and Others 1998 (4) SA 1157 (CC) (1998 (7) BCLR 855): dictum in para [32] applied

Minister of Safety and Security and Another v Carmichele 2004 (3) SA 305 (SCA) (2004 (2) BCLR 133; [2003] 4 All SA 565): referred to

National Education Health and Allied Workers Union v University of Cape Town and Others 2003 (3) SA 1 (CC) D ((2003) 24 ILJ 95; 2003 (2) BCLR 154): dictum in paras [25] - [29] applied

National Gambling Board v Premier, KwaZulu-Natal, and Others 2002 (2) SA 715 (CC) (2002 (2) BCLR 156): referred to

Payen Components SA Ltd v Bovic Gaskets CC and Others 1994 (2) SA 464 (W): applied E

President of the Republic of South Africa and Others v United Democratic Movement (African Christian Democratic Party Intervening; Institute for Democracy in South Africa and Another as Amici Curiae) 2003 (1) SA 472 (CC) (2002 (11) BCLR 1164): dictum in para [32] applied

S v Basson 2005 (1) SA 171 (CC) (2004 (1) SACR 285; 2004 (6) BCLR 620): referred to F

S v Bequinot 1997 (2) SA 887 (CC) (1997 (1) SACR 369; 1996 (12) BCLR 1588): applied

S v Boesak 2001 (1) SA 912 (CC) (2001 (1) SACR 1; 2001 (1) BCLR 36): referred to

Taylor & Horne (Pty) Ltd v Dentall (Pty) Ltd 1991 (1) SA 412 (A): dictum at 421 - 2 applied G

The Concept Factory v Heyl 1994 (2) SA 105 (T): dictum at 115 applied

Times Media Ltd v South African Broadcasting Corporation 1990 (4) SA 604 (W): dictum at 606 applied

Union Wine Ltd v E Snell and Co Ltd 1990 (2) SA 189 (C): dictum at 197D - F and 198I - J applied

Van Eeden v Minister of Safety and Security (Women's Legal Centre Trust, as Amicus Curiae) 2003 (1) SA H 389 (SCA) ([2002] 4 All SA 346): referred to

Zondi v MEC for Traditional and Local Government Affairs and Others 2005 (3) SA 589 (CC) (2005 (4) BCLR 347): dictum in para [12] applied.

Statutes Considered

Statutes

The Constitution of the Republic of South Africa, 1996, ss 25 and 39(2): see Juta's Statutes of South I Africa 2006/7 vol 5 at 1-24, 1-25 and 1-28.

Case Information

Application for leave to appeal against a decision of the Supreme Court of Appeal. The facts appear from the judgment of Langa CJ (with whom the rest of the Court concurred). J

2007 (6) SA p353

D N Unterhalter SC (with J M Heher, J A Cassette and A G Gotz) for the applicant. A

G J Marcus SC (with A P H Cockerell) for the...