South African Liquor Traders' Association and Others v Chairperson, Gauteng Liquor Board, and Others

• Jurisdiction: South Africa
• Court: Constitutional Court
• Judge: Langa CJ, Moseneke DCJ, Madala J, Mokgoro J, Ngcobo J, Nkabinde J, O'Regan J, Sachs J, Skweyiya J, Van Der Westhuizen J and Yacoob J
• Judgment Date: 02 June 2006
• Citation: 2009 (1) SA 565 (CC)
• Docket Number: CCT 57/05
• Counsel: R Bhana SC for the applicants. No appearances for the first and second respondents. S Budlender for the third respondent. KD Moroka SC (with SM Lebala) for the third respondent's attorney.

O'Regan J:

C [1] The applicants seek the confirmation of an order of constitutional invalidity made by the Pretoria High Court in respect of the definition of 'shebeen' contained in s 1 of the Gauteng Liquor Act 2 of 2003 (the Act). The proceedings before the High Court were unopposed and the order was made in unopposed motion court, with no reasons being given D originally by the judge for the order.

[2] The definition in issue reads as follows:

'shebeen' means any unlicensed operation whose main business is liquor and is selling less than ten (10) cases consisting of 12 \x 750 ml of beer bottles.

E The definition was challenged as vague on the grounds that it does not stipulate a period within which the specified quantity of beer bottles is to be sold and accordingly cannot be used to identify a shebeen with any precision at all. It was also challenged on the ground that it was F irrational. The court order made by the Pretoria High Court provided that the second portion of the definition should be severed so that the definition would read as follows: 'shebeen'' means any unlicensed operation, whose main business is liquor.' The order of the High Court will have no force and effect unless confirmed by this court. [1]

G [3] The first applicant is the South African Liquor Traders' Association (SALTA), a corporate body which represents the interests of the broad class of liquor traders in South Africa, including taverners, shebeen owners, liquor store owners and hotels. It apparently has approximately 200 000 members and its objectives include the promotion of the interests of its members and the monitoring of liquor legislation.

H [4] The second to fifth applicants are all owners of shebeens who have been issued with shebeen permits under the Act. The sixth to fifteenth applicants are manufacturers and distributors of alcoholic beverages in South Africa.

O'Regan J

[5] The first respondent is the Chairperson of the Gauteng Liquor Board A who was appointed by the third respondent in terms of s 4(3) of the Act. The second respondent is the Gauteng Liquor Board, a juristic person, established in terms of s 2 of the Act. The third respondent is the Member of the Executive Council responsible for Finance and Economic Affairs in the province of Gauteng (the MEC). B

[6] The applicants assert that they bring the application in their own names, as well as in the public interest, and on behalf of all shebeen owners who have been granted permits in terms of the Act. SALTA furthermore asserts that it brings the application in the interest of its members. Nothing turns on the issue of standing in this case, and C therefore it is not necessary to consider whether the applicants are entitled to their standing on the grounds they assert.

Background to the litigation

[7] The Act was passed during 2003. Some of its provisions came into D force on 1 April 2004, and the balance, including those relevant to the current application, on 1 November 2004. It has sought to normalise the sale of liquor by shebeens for the first time. Historically, shebeens have been informal and unlicensed liquor traders selling liquor largely to customers in townships. In many cases, shebeens operate from private homes and are small traders. Their businesses have always been considered E unlawful, and they have suffered the consequential vulnerability and marginalisation. The Act seeks to change this by bringing shebeens within the scheme of the Act. It provides the definition of shebeen referred to above and also provides in s 141(1)(m) that the MEC may make Regulations regarding 'a phased-in approach, whereby shebeens would be given an opportunity to comply with the Act'. F

[8] Regulations were passed, as contemplated by s 141(1)(m) of the Act, and also came into force on 1 November 2004. Regulation 21 provides as follows:

As contemplated in section 141(1)(m) of the Act - G

(a)

any person who on the date of promulgation of these regulations has been conducting a shebeen shall within four months from the date of promulgation of these regulations lodge in duplicate an application with the secretary of the local committee in accordance with Form 10 in Schedule 2 for a shebeen permit; and

(b)

a shebeen permit shall be valid for a period of 18 months, from the H date of promulgation of these regulations.

[9] A number of permits were issued as contemplated by reg 21. The terms of those permits sparked the applicants' approach to the High Court. The notice of motion annexed a number of such permits and a representative example is the following: I

Liquor Act, 2003

Shebeen Permit

Valid from 01 November 2004 - 01 May 2006

Virginia Mkize is hereby licensed to sell not more than ten cases of 750ml beer, per week, upon premises and the plan approved, situated J

O'Regan J

A at 128 Johnny Arendse Street, Reiger Park, in the district of Boksburg such as, in accordance with the conditions of the Act or any other law, authorised to be conducted under the above-mentioned licence.

Trading Hours From 10:00 - 02:00

Liquor not required for immediate sale, shall be stored on the licenced B premises.

It will be seen that the concept of ten cases of beer contained in the definition, has been moved to the permit and, qualified by the term 'per week', now serves as an upper limit of the amount of beer which Ms Mkize may sell. Moreover, the permit does not expressly permit C Ms Mkize to sell any liquor other than beer.

[10] It will also be noted that the permit was valid for a period of 18 months from the date of promulgation of the regulations and that those permits, on their face, lapsed on 1 May 2006. At the hearing of this matter on 3 May 2006, however, we were informed that further D regulations were promulgated on 28 April 2006 which have the effect of extending the validity of permits for a further twelve months. [2] Moreover, the amended regulations provide that further permits could be issued for a 12-month period only upon application by shebeen owners. [3] It would appear that all permits previously issued in terms of regulation 21 are E therefore now valid until 1 May 2007.

[11] Aggrieved at the terms of the permits, the applicants approached the High Court for an order declaring the definition of shebeen in s 1 of the Act to be inconsistent with the Constitution, on the grounds of vagueness and irrationality, as well as for ancillary orders declaring that the limit imposed upon the sale of liquor under these shebeen permits F was ultra vires the terms of the legislation and therefore invalid.

[12] In the founding affidavit, it is alleged that it is not possible to run a profitable shebeen selling only ten cases of beer per week and that the livelihood of shebeen owners has therefore been placed in jeopardy. Moreover, it is said, this could not have been the intention of the legislation which clearly intends to introduce a phased-in process G whereby shebeen owners will obtain liquor licences. It is also asserted that there is no provision in the Act or regulations which permits the authorities to limit the sale of liquor by shebeens to ten cases of beer.

Proceedings in the High Court

H [13] The applicants launched proceedings in the High Court during April 2005. No answering affidavits were filed by the respondents and the application was enrolled for hearing on 12 October 2005. On the day of the hearing, the State attorney on behalf of the respondents indicated to the applicants' attorneys that they did not oppose the application and I consented to the relief sought. Accordingly, when the matter was called in court, the judge was informed that the parties were seeking an order by consent.

O'Regan J

[14] The High Court accordingly made the following order: A

By agreement between the parties it is ordered as follows:

1.

The last part of the definition of the word 'shebeen' from the words 'and is selling' to 'beer bottles' in section 1 of the Gauteng Liquor Act 2 of 2003, is severed.

2.

That part of the definition referred to in paragraph 1 above is B declared to be unconstitutional and therefore of no force or effect.

3.

That any condition in the shebeen permits issued by the first and/or second respondent or their delegate since 1 November 2004 restricting permit holders to selling not more than (or less than) 10 cases of 12 \x 750ml beer bottles per week is declared to be ultra vires and invalid.

4.

All conditions as referred to in paragraph 3 above in every shebeen C permit issued by the first and/or second respondent or their delegate, are struck out.

5.

The first and/or second respondents are directed to issue shebeen permits authorising the sale of liquor as defined in the Gauteng Liquor Act, and without any conditions relating to type and D quantity of liquor to be sold.

6.

The third respondent is directed to forthwith convey the contents of this order in writing to the MEC of Safety and Security/Liaison, for the purpose of ensuring that the order is communicated to all persons involved in enforcement of the Gauteng Liquor Act and the regulations thereunder.

7.

The Third Respondent is directed to publish a copy of this Order E in the Gauteng Provincial Gazette and in two different newspapers circulating in Gauteng, by or before 12 November 2005.

8.

Notwithstanding the provisions of paragraphs 6 and 7 above, it is recorded for clarity that the operation of this order (save for the declaration in paragraph 2 above which shall be suspended pending confirmation of invalidity by the Constitutional Court), will be F with immediate effect from the date of the grant of this order.

9.

The costs of this application on the scale as between party and party as taxed, including the costs of two counsel, shall be paid by the Respondents jointly and...