Weare and Another v Ndebele NO and Others

• Jurisdiction: South Africa
• Court: Constitutional Court
• Judge: Langa CJ, Moseneke DCJ, Madala J, Mokgoro J, Ngcobo J, O'Regan J, Sachs J, Van Der Westhuizen J and Yacoob J
• Judgment Date: 18 November 2008
• Citation: 2009 (1) SA 600 (CC)
• Hearing Date: 19 August 2008
• Docket Number: 15/08
• Counsel: N Arendse SC (with M du Plessis) for the applicants. AJ Dickson SC (with AA Gabriel) for the respondents.

Van der Westhuizen J:

Introduction

[1] This is an application for confirmation of an order of constitutional C invalidity made in respect of s 22(5) of the KwaZulu-Natal Regulation of Racing and Betting Ordinance 28 of 1957 (the ordinance) by Rall AJ in the Pietermaritzburg High Court. [1] The section provides that - in the province of KwaZulu-Natal - a juristic person may not hold a licence to carry on the business of bookmaking. Only natural persons may hold D bookmaking licences in the province. Juristic persons in other provinces may do so. The High Court held that this constituted an irrational and arbitrary differentiation and thus declared the section unconstitutional for contravening s 9(1) of the Constitution, which provides for equality before the law. [2] The High Court also found that s 9(3), which prohibits unfair discrimination, [3] was violated by s 22(5).

E [2] The case raises questions regarding the enjoyment by juristic persons of the right set out in s 9 and the application of that section to a legislative differentiation which the applicants allege is obsolete. It also raises the question whether the invalidation of provincial ordinances has to be confirmed by the court.

Background F

[3] Gambling in KwaZulu-Natal is currently regulated by two pieces of provincial legislation. Racing, betting and bookmaking are regulated by the ordinance. Casinos, gaming machines, bingo and lotteries are G regulated by the KwaZulu-Natal Gambling Act 10 of 1996. These operate concurrently with the National Gambling Act 7 of 2004. Gambling is an area of concurrent national and provincial competence under the Constitution. [4]

Van der Westhuizen J

[4] For some time the executive in the province has been preparing draft A legislation to replace the ordinance and the 1996 provincial Gambling Act and to bring the regulation of all gambling in the province under a single statute. Bills were prepared in 2003 and 2007; the 2007 Bill is currently under consideration in the provincial legislature.

[5] Section 22(5) of the ordinance restricts the category of persons who B may hold bookmaking licences in the province. It provides:

No bookmaker's license shall be issued in the name of any partnership or any company or other association of persons, or to the representative or agent or officer of any partnership, company or association, or to the representative or agent of any individual on behalf of that individual: C Provided that nothing hereinbefore contained shall be deemed to prevent the carrying on of a bookmaker's business in partnership by two or more persons each of whom is the holder of a valid bookmaker's license issued to him in terms of the ordinance.

[6] By contrast, both Bills contain explicit provisions for juristic persons to hold bookmakers' licences in KwaZulu-Natal. [5] However, this D proposed change has not yet been enacted and s 22(5) still regulates the position.

[7] The first applicant, Mr Michael Weare, holds a bookmaking licence under the ordinance and owns a bookmaking business in KwaZulu-Natal under the name 'The Betting Shop'. In 2001 Mr Weare was E offered the position of managing director of the second applicant, Betting World (Pty) Ltd, a position he accepted and continues to hold. Betting World, a juristic person, carries on the business of bookmaking in the other eight provinces of South Africa, but as a result of the prohibition in s 22(5) of the ordinance does not do so in KwaZulu-Natal. F

[8] The parties concluded an agreement in terms of which Betting World undertook to provide managers for Mr Weare's business. The parties also concluded a conditional contract of sale, providing that Mr Weare would sell his business to Betting World, subject to various suspensive conditions. This agreement was to lapse if the conditions were not G fulfilled before the end of December 2002. Among the conditions was the stipulation that KwaZulu-Natal's legislation had to change in that time to permit juristic persons to hold bookmaking licences. Since this legislative change did not occur, the agreement fell through.

[9] In August 2006 the Office of the Premier addressed a letter to H Mr Weare, expressing the view that the agreement possibly contravened the provisions of the ordinance. Disciplinary proceedings then commenced. These were suspended after the applicants had launched their challenge to s 22(5) in the High Court and remain so pending finalisation of this case. I

Van der Westhuizen J

A [10] The applicants cited five respondents before the High Court. The application was opposed by only two: the first, Mr Ndebele, cited in his capacity as the Premier of KwaZulu-Natal; and the third, the KwaZulu-Natal Bookmakers Control Committee, the body created in terms of s 21A of the ordinance to control bookmaking operations in the province. B The Premier and the Committee both appealed to the court against the confirmation of the order of the High Court. The fourth respondent, Mr Mpahlwa, was cited in his capacity as the Minister of Trade and Industry, who is responsible for gambling at national level. The Minister indicated his intention to abide the decision of the High Court and the decision of the court. The other two respondents, the National Gambling C Board and the KwaZulu-Natal Provincial Gambling Board, did not respond to the litigation at any stage.

Issues

[11] Five issues arise for consideration. First, the applications for D condonation filed by the applicants and the third respondent must be considered. Second, the present case concerns the constitutional validity of a provincial ordinance. The question is whether the invalidation by the High Court must be confirmed by the court, as the invalidation of an Act of Parliament and a provincial Act must be. Third, can juristic persons E be bearers of the right set out in s 9 of the Constitution? Fourth, does s 22(5) of the ordinance violate s 9(1)? And fifth, was the High Court correct in its further finding that, in addition to violating s 9(1), the differentiation in s 22(5) constituted unfair discrimination contrary to s 9(3) of the Constitution?

Condonation F

[12] The applicants seek condonation for the late filing of their application for confirmation, conditional on it being found that the filing was indeed late. The applicants filed on 31 March 2008. Judgment was handed down in the High Court on 29 February 2008. However, the G applicants state that the judgment was only certified by the High Court Registrar and sent to the applicants' attorneys on 7 March. Rule 16(4) of the court's rules provides that a party who wishes to apply for confirmation of an order of invalidation has 15 days from the date on which the order is made to seek confirmation. If this period is taken to run from H 29 February, it expired on 25 March and the applicants would have filed six days late. Alternatively, if the period is taken to run only from 7 March when the judgment was certified, it expired on 1 April and the applicants' filing would be in time.

[13] In my view the need for certainty requires that time periods should I run from the date of the order that is the subject of the application, rather than from the date of certification. The matter must therefore be approached on the basis that the applicants filed late.

[14] The applicants state that they waited to determine whether there would be any appeal against the High Court decision and that there was some uncertainty in this regard. This explanation is not entirely J convincing. The applicants also note that the respondents suffered no

Van der Westhuizen J

prejudice as a result of the very short delay, while the applicants would A suffer considerable prejudice if their application were refused. In view of this factor, as well as the shortness of the period involved and the fact that the certification took some time, it is in the interests of justice to grant condonation.

[15] The first respondent, the Premier, filed a notice of appeal in time on B 25 March 2008. However, the third respondent, the Committee, only filed their notice of appeal on 5 June 2008. They state that a decision on whether to participate in the litigation had to be taken by the members of the Committee. The Committee could apparently only meet on 3 April - after the time for filing had expired. Since there had been C several changes in personnel during February 2008 and the members of the Committee were new and unfamiliar with the litigation, it was decided to obtain the opinion of senior counsel before deciding whether or not to join the appeal. This opinion was received on 24 April. The Committee then met again, over a month later, on 27 May, and decided to appeal against the order, filing on 5 June. D

[16] This explanation is inadequate. Even if the difficulties caused by the change in personnel are taken to explain the delay between 3 April and 24 April while opinion was received, no explanation is given for the other delays. In particular, it is not explained why on two occasions it took the Committee more than a month to meet. This shows a disregard for the E time frames set out in the rules of the court. Furthermore, the third respondent associated itself entirely with the argument of the first respondent and was represented by the same counsel, so no prejudice follows from their exclusion. Taking the interests of justice into account, there is no reason to grant condonation. F

[17] In view of this finding, the third respondent plays no further part in the consideration of this matter. For clarity, I refer to the first respondent (the first appellant before the court) as 'the Premier'.

Does the invalidation of a provincial ordinance have to be confirmed by this court? G

[18] Section 172(2)(a) of the Constitution provides:

The Supreme Court...