---

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

 

(1)      NOT REPORTABLE

(2)      NOT OF INTEREST TO OTHER JUDGES

CASE NO: 82407/16

10/8/2018

 

In the matter between:

 

CASINO ASSOCIATION OF SOUTH AFRICA                                                    Applicant

 

and

 

MINISTER OF TRADE AND INDUSTRY                                                            First Respondent

MEC FOR FINANCE, ECONOMIC AND ENTERPRISE

DEVELOPMENT, NORTH WEST                                                                       Second Respondent

NATIONAL GAMBLING POLICY COUNCIL                                                    Third Respondent

NATIONAL GAMBLING BOARD                                                                       Fourth Respondent

NORTH WEST GAMBLING BOARD                                                                  Fifth Respondent

 

JUDGMENT

 

Tuchten J:

 

1          On 10 June 2016, the first respondent {the Minister) published a decision[1] (the decision) which he had made in due form to set the maximum number of casino licenses permitted in the Republic at 41. In the same notice, the Minister set the maximum number of casino licenses in the North West Province (North West) at five. The effect of the decision was to increase the maximum number of casino licenses permitted in South Africa from forty to 41 and to increase the maximum number of casino licenses permitted in North West from four to five.

2          The applicant (CASA), aggrieved by the decision, applied by notice of motion dated 19 October 2016 to set aside the decision which CASA said the Minister had "purportedly" made.[2] CASA is a body established by licensed casino owners to represent their interests.

3          The Minister's competence to make such decisions arises from the provisions of s 45 of the National Gambling Act, 7 of 2004 (the 2004 Act). The section reads:

(1)       The Minister, by regulation made in accordance with section 87, and after considering the criteria set out in this section, may prescribe a maximum number of casino licences that may be granted in the Republic, and in each province.

(2)       Before making a regulation contemplated in subsection (1), the Minister may consult the Competition Commission, and must consider, amongst other things, the following criteria:

(a)       The number and geographic distribution of-

(i)        existing licensed casinos and interactive providers operating within the Republic, and the duration of the licences under which they operate; and

(ii)       additional casino licences available in terms of the maxirnum numbers then in force; and

(b)       whether it is desirable to alter the maximum numbers of casino licences, in the Republic as a whole, or within any particular province or provinces, in order to-

(i)        address the incidence and social consequences of compulsive and addictive gambling;

(ii)       promote black economic empowerment; or

(iii)      promote-

(aa)     new entrants to the gambling industry;

(bb)     job creation within the gambling industry;

(cc)     diversity of ownership within the gambling industry;

(dd)     efficiency of operation of the gambling industry; or

(ee)     competition within the gambling industry.

(3)       If the Minister establishes a maximum number of casino licences, in the Republic as a whole or within a particular province, that is lower than the number of licensed casinos then operating in the Republic or that province, the licensed casinos then operating may continue to operate, subject to the conditions of their respective licences, but no additional licences may be granted in the Republic or the particular province, as the case may be, until the number of operating casinos is lower than the prescribed maximum number of casino licences.

 

4          Section 61 of the 2004 Act provides for the establishment of the third respondent, the National Gambling Policy Council (the Council). It consists of the Minister as chair and one of a number of "regular members", together with the members of the executive councils of the several provinces responsible for casinos and other forms of gambling and others as non-voting members. One of the functions of the Council is to operate as a forum in which the national and provincial governments consult on a range of gambling-related issues including those relating to gambling policy.[3]

5          As a body through which the national and provincial spheres of government seek to cooperate with each other, the Council must seek to reach its decisions through consensus. Only if it cannot achieve consensus, may it resolve a matter before it by formal vote.[4] And then, if it takes a vote, a motion so proposed can only succeed if it is supported by the Minister and at least five of the regular members.

6          CASA identified a number of grounds of review in its founding affidavits.[5] These were summarised in counsels' heads to three grounds: Firstly, that the Minister did not apply his own mind to the matter at hand but merely rubber stamped a decision made by the Council. Secondly, that the decision was motivated by a single, improper (so CASA says) concern: in 2006 the provincial boundaries had been altered so that a casino which had initially operated from ground North West thereafter fell in Gauteng; and the Minister acted to right that perceived historical wrong. Thirdly, that the Minister "did not assess the matter in a rational or reasonable way" in that he did not consider relevant information.

7          CASA, the Minister and the second and fifth respondents (I shall collectively call the second and fifth respondents North West) were separately represented by counsel. The third and fourth respondents abided.

8          I must give some background. The National Gambling Act, 33 of 1996 (the 1996 Act) provided in s 13(1)0) that there were to be a maximum of 40 casinos nationwide, with six in Gauteng and five in North West. The 2004 Act repealed and replaced the 1996 Act. Section 45 of the 2004 Act, as we have seen, gave the Minister the power to determine the numbers of casinos both nation wide and in each province. Item 6 of the Schedule to the 2004 Act however preserved the number and provincial allocations of the casinos set by the 1996 Act until the Minister exercised the power conferred by s 45.

9          In 2006 pursuant to an amendment to the Constitution and the Cross­ Boundary Municipalities Laws Repeal and Related Matters Act, 23 of 2005, the national government altered various provincial boundaries, including the boundary between Gauteng and North West. This is how and why a casino called in the papers the Morula Sun, which had formerly been in (and supplied revenue to) North West, came to fall into Gauteng. The land on which the Morula Sun operated was transferred from North West to Gauteng.

10        In an apparent attempt to regularise the position by which an existing casino "moved" from North West to Gauteng, the then Minister of Trade and Industry, acting under s 45 of the 2004 Act, published a regulation which kept the number of permitted national licenses at 40, increased the number of such permitted licenses in Gauteng to seven and reduced the equivalent number in North West to four.

11         North West embarked on a sustained campaign to persuade the Minister to grant North West an additional license so as to bring the permitted number of licenses within that province back up to five. They commissioned reports on the subject and engaged the Minister in correspondence advocating their position. They made presentations to the Council. Their case was that the decision had been unlawful because they had not been consulted and they deplored the drop in North West revenue the move had caused. The complaint that the move had reduced their revenue had substance: in the 2005/06 financial year, the Morula Sun contributed some 18,5% of the provincial gross gambling revenue.[6]

12         North West commissioned a firm called Mafika Synergistix (Mafika) to provide a motivation for an additional casino license to compensate for the casino it had lost. The Mafika report, as it was referred to in argument, was made available to the Minister in 2006. Mafika concluded that there was R267 million of potential gaming revenue that either was being spent in other provinces or was not being spent at all. The catchment area of North West, Mafika concluded, was such that it was probable that an additional casino in North West would be profitable. It suggested that Hartebeespoort or Potchefstroom would be suitable locations for the proposed additional North West casino.

13         In addition, just before the boundary adjustment, North West obtained a report from KPMG to assess the impact of the boundary change on North West. KPMG concluded that there would be a r1egative effect on North West and suggested that this be offset by a revenue sharing arrangement with Gauteng. The Minister received the KPMG report in about 2006.

14         Much bureaucratic interaction then took place including meetings between North West and Gauteng authorities. It is clear from the record that the probably unintended and unforseen consequences of the move of the Morula Sun to Gauteng required the Minister to undertake fairly complex negotiations with a wide range of interested parties whose interests in certain important respects were in conflict.

15        For instance, while North West took the position that the move had deprived it of a substantial part of its revenue, which could be redressed by an additional casino within its territory. CASA, on the other hand, maintained that an additional casino would simply cut the gambling revenue into smaller slices, to the detriment of its members, presumably because it believed that the gambling market had reached peak saturation. Which of these views would eventually be proved correct could only be predicted or forecast at the time the Minister was called upon to make the decision.

16         The issue was discussed regularly at Council meetings. On 16 February 2009, the minutes of the Council note that the matter would be considered by the Gambling Review Commission ((the GRC). The GRC was appointed by the present Minister in 2009 to, amongst other things, review the evolution of the gambling industry since 1996, assess its social and economic impacts, with social reference to the demography of gambling participants, the incidence of gambling addiction and associated problems, youth gambling and the effectiveness of then current strategies to mitigate the negative effects of gambling and to assess the proliferation in South Africa of both licensed and illegal activities and to what extent the various regulatory bodies had met their legislative objectives. The GRC reported to the Minister in 2011. Its report was considered in Parliament.

17         The GRC comprehensively reviewed the state of gambling, legal and illegal, in South Africa. It describes how before 1994, casino gambling was illegal in South Africa but legal in its neighbouring states and several of the homelands, with the result that South Africa lost revenue to casinos outside its then borders. The Lotteries and Gambling Board established in 1994, which became known as the Wiehan Commission (Wiehan), was appointed to advise the government on a national policy for gambling in South Africa. Wiehan reported in 1996. As a result of Wiehan, casino gambling was made legal in South Africa and the predecessor to the 2004 Act, the 1996 Act, was enacted to regulate gambling in South Africa.

18         Wiehan recommended that casino licenses be limited to 40 in number. This figure was arrived at on the basis that one casino for every 1 million inhabitants of the country was appropriate. As I have pointed out, a maximum of forty casinos in number was fixed in the 1996 Act.[7] The GRC considered that this figure should be retained. But by the time the GRC had reported, the power to set the number of casinos in the country as a whole and in each province was conferred upon the Minister by s 45 of the 2004 Act.

19         The GRC devoted considerable attention to the negative socio­ economic aspects of gambling, which include the phenomenon of problem gambling. The undeniable fact is that every gambling venue potentially increases the potential for gambling of a kind and to the extent which can adversely impact on gamblers and their families. At the same time, regulated gambling had become and surely still is a vital generator of revenue, job creation and infrastructure development in South Africa. So, in 2005, casinos in North West received R49 million in gambling levies. Of this, as I have said, the Morula Sun contributed 18,5% or some R9 million. Gambling was the second biggest generator of provincial "own revenue". The GRC noted an assessment by the National Gambling Board that gambling directly and indirectly was responsible for providing jobs for no less than 2,64% of the workforce. The task of the Minister and the regulating authorities is to balance these factors .

20         The GRC concluded that the maximum number of 40 casinos was appropriate. At the time the GRC reported, the number of persons gambling had dropped from earlier levels. Of course the population of South Africa had increased from its 1996 number but the GRC, while remarking that the figure of forty had based on an assessment that one casino to every million inhabitants was appropriate did not go into great detail in this regard. The main ground for the recommendation of the GRC that the maximum number of forty casino licenses should be retained was[8] that of the forty permissible licenses, three were not in use.

21         The Council met on 14 September 2009. The meeting attended by, amongst others the Minister, North West, Gauteng and the Minister.[9] North West made the case that it was not proposing that the number of licenses should be increased but that the license it had lost should be reinstated. This inevitably meant. however, that if the total were not increased, one of the other provinces would have to lose a license. Kwa-Zulu Natal expressed the view that North West's claim was legitimate but that claim should be balanced against the negative effect of gambling and the duty to guard against the over-stimulation of gambling. In response, the minutes record that the Minister proposed that North West be allowed to make a presentation at the next meeting but that it should be born in mind that the three licenses which were not in use were held by other provinces which were in the process of utilising the unused licenses. (This shows that circumstances had significantly changed since the GRC had reported.) The Minister also cautioned against the negative effects of gambling and the over-stimulation of gambling.

22        On 12 November 2010, North West made its presentation. A discussion followed which focussed mainly on the revenue stream which might have been lost through the re-allocation of the Morula Sun, the acceptable or appropriate number of licenses which should be allocated, the socio-economic impact of gambling, whether North West would be able to grant an additional license and, if so, whether an additional North West casino would be efficient and sustainable. The Minister told the meeting that his department, the Department of Trade and Industry (the DTI), had not made any decisions regarding the number of licenses and requested proposals on a solution to provide North West with a fifth license "without going [beyond] the allocated forty". The issue of North West's lost revenue stream and the requirements imposed on the National Treasury was discussed. The Minister observed that there might be a need to engage the National Treasury on this Issue.

23        In fact the National Gambling Board advised the Minister that the total number of 40 licenses should not be increased. For example, In 2007, the NGB expressed the view to the Minister that the number of forty should not be increased until proper research was conducted on the need for further gambling in the country. The DTI officials too were against the increase. Their view, expressed in a briefing submission to the Minister submitted in 2009 for a meeting in July 2009 was that the revenue lost by North West was not significant and that the maximum number of forty should not be increased until research had been conducted.

24        The Council met on 2 March 2015. The minutes record that the Council had agreed at a meeting on 5 September 2014 that North West should be granted an additional license and that the DTI would write to North West informing it of the decision. There is nothing in these minutes to suggest that the Council discussed whether this should be achieved by reducing the number of licenses held by another province or by increasing the number of allocatable licenses from 40 to 41. To achieve the result contemplated by the Council, however, either a re-allocation or an increase in the total number of licenses had to follow. There was no other way to achieve the result on which the Council had agreed.

25        In a letter dated 3 March 2015, the Minister wrote to the second respondent (the North West MEC) stating that subsequent to the Council meetings to which I earlier referred, a decision had been taken that the "Casino License of the Morula Sun" would be resolved by the issue by the Minister of a casino license in North West "in due course after due processes have been followed".

26        On 10 March 2015, the Minister met with representatives of CASA. He told them that he was considering increasing the number of casino licenses by granting North West the fifth license which it had lost when the Morula Sun had fallen under the jurisdiction of Gauteng

27        On 15 May 2015, the Minister published a proposed national gambling policy in the Government Gazette.[10] Paragraph 1.3.2 of the proposed policy proposed that "... the Minister in resolving the issue related to the North West license should allocate one additional license." CASA responded to the proposal. CASA was opposed to the creation of an additional license and the expansion of the number of casino licenses. In its response to the proposed policy, conveyed to the DTI in a letter dated 28 June 2015, CASA said:[11]

 

It is of the utmost importance to stress that certainty regarding the number of casino licenses is absolutely crucial to the stability of the industry, as well as for investor confidence. It is CASA's view that the award of another license in the North West Province will open the flood gates for similar demands in other Provinces, setting a harmful precedent for the future of what is currently a stable industry operating within known parameters. For obvious reasons, this would have an extremely negative effect on investor confidence and the stability of the casino industry in general.

 

28          The Minister replied to CASA in a letter dated 17 June 2015 as follows:

 

The decision to award a 5^th casino license to the North West Province was discussed and adopted during the National Gambling Policy Council (NGPC) meeting of 2 March 2015. A decision was taken to replace the casino license lost by the North West Province as a result of the municipal border demarcation resulting on the relocation of the Morula Sun to the Gauteng Province.

 

I must also indicate that whilst research could be vital to decision making, it does not replace the decisions taken by policy makers and ultimately the legislatures. In terms of section 87 of the National Gambling Act, 2004, public comment must be sought on the matter. A notice to this effect will be published in due course inviting the public and relevant stakeholders to comment on the proposal.

 

29         The notice calling for comment was duly published and public comment was invited. CASA responded to this invitation, in essence repeating its earlier objection. The Minister responded personally to CASA's submission. The final national gambling policy was published in the Government Gazette on 1 April 2016. The policy records the proposal that the Minister, in resolving the issue relating to the North West license, should allocate one additional license. As I have set out, the decision was formally published on 10 June 2016.

30        The parties before me are not in agreement about how the decision should be characterised. Counsel for CASA submit that the decision was administrative, rather than executive, action. Counsel for the Minister and North West adopted the contrary argument. This issue is not decisive of the case because CASA has brought its review under the Promotion of Administrative Justice Act, 3 of 2000 (PAJA) or the principle of legality in the alternative.

31        A power that is more closely related to the formulation of policy is likely to be executive in nature while one that is closely related to the implementation of legislation is more likely to be administrative. The more constrained the power, the more likely it is to be administrative.[12]

32        In my view, the decision at issue iii the present case is more closely related to policy formulation than to the implementation of legislation. While s 45 of the 2004 Act obliges the Minister to take certain considerations into account, the measure is otherwise silent as to how, in the substantive sense, the decision maker may exercise the power conferred. For example, a decision maker who has taken into account the considerations specified may in a proper case accord those considerations scant or even no weight and may base the decision on considerations not mentioned in s 45 at all.

33        A further factor which leads me to this conclusion is that a decision to alter the number of permissible licenses in the country or in a province does not adversely affect the rights of any person and has no direct external effect,[13] The decision is moreover not one of the species which the bureaucracy, in the application of policy, carries out the daily functions of the state.

34         I therefore conclude that the impugned decision is executive in nature.

35         The result of this conclusion is that an issue raised by the second and fifth respondents would have become moot: whether, if the decision is in fact administrative action, CASA fell foul of s 7 of PAJA. This provision requires that a PAJA review must be brought not later than 180 days after the date on which the aggrieved person was informed of the administrative action, became aware of the action and the reasons for it or might reasonably have been expected to have become aware of the action and the reasons.

36         The basis of this argument was that on CASA's case, according to the second and fifth respondents, CASA became aware of the decision on 30 October 2015 or on 2 March 2016. On this basis, then, the launching of the review fell outside the prescribed period of 180 days.

37         In argument before me, counsel for North West abandoned the argument. Counsel accepted that the argument mischaracterised CASA's case. CASA's case on the papers is not that the Minister took the decision on one of the earlier dates. It is that the Council took the decision on the earlier date and the Minister adopted it without applying his mind to the matter when he published the regulation on 10 June 2016; or that the Minister failed to consider the factors he was obliged under s 45 to consider; or that the decision was irrational. It is the conduct of the Minister on 10 June 2016 which is the subject of CASA's attack. What took place before that date is, on CASA's case, merely evidence of the allegedly flawed nature of the Minister's action. I agree that the argument was misconceived.

38         As I have explained, CASA's main submission on the papers, in counsels' heads and for much of the argument was that the Minister had acted under dictation: that the decision of 10 June 2016 was really the decision of the Council and that the Minister had merely gone through the motions of inviting comment on his proposed decision without applying his mind to the matter at any stage.

39         Quite early on during argument I put to counsel for the applicant that it might be difficult to conceive of dictation to the Minister by a body which the Minister himself chaired. Would that not, I asked, amount to a submission that the Minister had been party to dictating to himself, which seemed to be a logical impossibility?

40         I suggested to counsel that I might have had more sympathy - at that level - with an argument that after the recommendatory decision of the Council, the Minister had closed his mind to further submissions to him. But that case, it seemed to me had not been made on the papers. At a later stage in their opening argument, counsel for the applicant referred me to para 62.2 of the main founding affidavit in which it was alleged that the opportunity to make representations was not a reasonable opportunity because the decision was already taken at the Council when the draft notice was published for comment.

41         In argument on behalf of North West, counsel pointed to the provisions of s 63(6)(a) of the 2004 Act and submitted that in circumstances such as these, dictation by the Council was legally impossible because the decision of the Council could only have been taken, if not by consensus, then with the support of the Minister.

42         Faced with these weighty considerations, counsel for CASA were constrained in reply to abandon the argument that the decision had been taken by the Council and merely rubber stamped by the Minister. I think that the concession was properly made. I therefore need not deal with this argument in any detail. But I must say that the letters written by the Minister, which counsel for CASA closely analysed and on which they based their erstwhile main argument do not bear out the factual contention. The Minister was not defending in those letters a s 45 decision, which had not yet been taken. He was defending the Council's recommendation: its advisory decision.

43        The main argument for CASA was not entirely abandoned. The decision was taken by the Minister, counsel conceded, but he had, counsel submitted, closed his mind to further submissions, particularly by CASA after the Council meeting. Paragraph 62.2 of the founding affidavit, counsel urged me, permitted counsel to make this argument.

44        I think I must quote the whole of para 62 of CASA's founding affidavit to place the argument in context:

 

It is apparent that the Minister did not take the Decision - the [Council] did. The Minister merely gave effect to that decision. That means that the Minister's decision falls to be reviewed and set aside on two further grounds:

62.1     It was taken "because of the unauthorised dictates of another person or body" , namely the [Council]. That is contrary to s 6(2)(e)(iv) of PAJA; and

62.2     The decision was not procedurally fair because those affected by the decision - including CASA - were not afforded a "reasonable opportunity to make representations" as required by s 3(2)(b)(ii) of PAJA. The opportunity was not reasonable because the decision had already been taken at the [Council] meeting when the Draft notice was published for comment.[14]

45        Paragraph 62 of the founding affidavit was not addressed in the Minister's answering affidavit. That affidavit concluded the answer proper with a reference to para 61 of the founding affidavit.

46        There is no reference in CASA's comprehensive heads to the ground advanced in para 62 of the founding affidavit. It is clear, in my view, that the para 62 grounds were intended to feature as nothing more than a further legal basis for CASA's main ground of review, ie that the Minister had not himself made the decision and that the true decision maker had been the Council. This is reinforced by the argument made under the rubric of irrationality in CASA's affidavits that several documents were not considered by the Minister. But CASA's representations are not among the documents which it is said the Minister did not consider.

47         I therefore conclude that it was not part of CASA's case as made out in the founding affidavits or indeed at all on the papers that if the Minister were found to have taken the decision himself and had not done so under dictation, the Minister did not apply his mind to the comments for which he called in the notice referred to in paragraph 27 above. It is therefore not open to CASA to argue this point.

48        Moreover, the point in para 62 was taken In the context of an attack under PAJA. The Minister was entitled to take the position, as he did, that the character of the decision was not administrative but executive; that the attack at that level was only made on the footing that PAJA was applicable; and to refrain from further dealing with the attack on the basis that he was content with his defence that PAJA was inapplicable and that he had not simply rubber stamped the decision.

49        Even if the case for a closing of mind had been made in the founding affidavit, I would have decided this issue against CASA. The Minister stated in his answering affidavit that he took CASA's representation into account.[15] The response by CASA in reply[16] was to deny these allegations "to the extent that[17] they imply that a final decision had not already been made." The "final decision" CASA was talking about, as I have been at pains to point out, was the decision of the Council rather than the Minister.

50        Moreover, CASA put up as part of its supplementary founding papers and without adverse comment, a letter dated 1April 2016 written by the Minister to the North West Gambling Board. This letter was written to communicate CASA's "concerns regarding the proposal to increase the number of casino licenses to 41". In the last paragraph of the letter, the recipient is asked to "consider the attached letter and communicate your thoughts on the matter to enable a coordinated and consistent response to CASA".

51        Counsel submitted that this last passage indicated that the Minister had made common cause with North West and showed that the Minister had not considered CASA's submission with an open mind.

52        I am unable to agree. The passage in question was not adverted to in CASA's affidavits. There is no indication that CASA intended to put this, in my view, strained interpretation on the passage. More to the point, the Minister was not given an opportunity to deal with the contention which was only advanced In argument and in reply. It seems to me that the letter shows that the Minister wanted to receive North West's response to CASA's submission before he made up his mind on the matter.

53        I conclude that there is no substance in the argument that the Minister closed his mind to representations made after the proceedings of the Council relative to the additional license had come to an end.

54        I shall deal with the remaining two grounds together. To do so, I must consider the nature of the executive decision which the Minister was called upon to make, the unique position both in law and in fact which the Council occupied in the decision making process and the material which was available to the Minister when he took the decision.

55        The record of the decision was produced by the Minister in instalments. Indeed, CASA took the position at one stage that the Minister was obliged to seek the leave of the court to supplement the record. Such an application was made but not argued before me; the parties agreed that those documents which the Minister produced were indeed documents which formed part of the record. CASA's submission however was that the Minister had not given adequate weight to or had not truly considered certain documents and therefore certain matters which CASA submitted pertained to the decision.

56        Counsel for CASA submitted that the Minister's decision did not adequately consider the incidence and social consequences of compulsive and addictive gambling.[18] There is a tension between the positive and negative factors which attend any permission to gamble. The religious objections of a former age are no longer at the forefront of the decision process. I shall focus on casino gambling because that is what this case is about. On the one hand there is the fact that the proceeds of gambling are a substantial source of revenue for the government and that the creation of a regulated gambling venue leads to job creation and infrastructure development. If short term anomalies are excluded, the casino operator must make a profit because the odds are stacked in its favour. All informed gamblers know this. But they gamble for a variety of reasons. They may be looking for an enjoyable night out, with the excitement of the prospect of beating the odds in the short term. They may have an affinity for gambling which in its most advanced form amounts to an addiction or a compulsion. They may be rich, in which case the money they lose may not matter that much. Or they may be poor and gamble away the money needed to put food on the table, clothe the children and send them to school.

57         These negative factors, carrying with them the spectre of social collapse of entire family units because the breadwinner gambles away his pay, were in one form or another anxiously identified and debated in the reports of the two commissions and others I have mentioned and they feature prominently in the deliberations of the Council. The Minister says that he bore this material and the problems they raise in mind when he made the decision and in my view he must have done so. He instituted a commission to consider ways of alleviating this problem. He sat in countless meetings where the problem was discussed and took part himself in those discussions.

58         The criticism is that the Minister did not in any sense spell out how the negative factors would be impacted by his decision. Counsel submit in effect that the section requires the Minister adequately to consider the factors enumerated ins 45(2). With this latter submission I agree. The Minister ought to have such regard to any relevant factor and must not be influenced by irrelevant factors. How would one determine if the Minister had had adequate regard to a particular factor? I think the answer is that the Minister must have a rational regard to each such factor.

59         Rationality and reasonableness must be kept conceptually distinct, although there may be some overlap between them. The Executive has a wide discretion in selecting the means to achieve its constitutionally permissible objectives . Courts may not interfere with the means simply because there are other more appropriate means that could have been selected. But where the decision is challenged on grounds of rationality, courts must examine the means selected to determine whether they are rationally related to the objective sought to be achieved. The purpose of the enquiry is not to determine whether there are other means which could have been used but whether the means selected are rationally related to the objective sought to be served. If (and I would add: only if) the means selected are not rationally related to the objective sought to be achieved, then they do not meet the standard demanded by the Constitution.[19]

60        The objective which the Minister sought to achieve in this case was the conferral upon the North West of the power to award a casino license additional to those which North West was at that stage by law empowered to award. In my view, the achievement of that objective was consistent with just ice and in the public interest. The loss of the Morula Sun caused North West to lose substantial revenue. The loss was almost inadvertent. It was a consequence hot of a process whereby the justice and appropriateness of the "transfer'' of the Morula Sun and its revenue capacity for the province in which it was situated was evaluated but because the transfer followed from the provincial border adjustments I have mentioned. It was only right that some means be found to compensate North West for its loss.

61         There were broadly three ways in which North West could be compensated for its loss. Firstly, one of the other provinces could have its quota reduced by one and North West's quota increased by one. That was referred to in argument as the transfer of a licence. Secondly, the Executive could make up the difference in revenue by allocating an annual amount to North West as compensation. And thirdly, the Minister could create a new license and award it to North West.

62         In my view the selection of the third option was rational. It is unnecessary to belabour the disadvantages of the first two options. Both of them involved taking something away from someone (a province or the fiscus). It was argued that one of the unused licenses could have been transferred to North West. But the minutes showed that the Minister himself observed that the provinces in question were in the process of awarding their heretofore unused licenses. One does not need much imagination to predict the howls of provincial anguish which would have followed a suggestion that a particular province should lose one of its licenses. Nor would it have been, to put it at its lowest, easy to persuade the Treasury to cut a notoriously inadequate national budget cake even more thinly when the Minister had the power to quantitatively ease the situation (if I may be permitted that vulgarism) by creating a new license. The allocation to North West of a power to award an additional casino license caused no such prejudice.

63         But the determination that the goal that the Minister sought to achieve was rational is not the end of the enquiry. The means used to achieve the goal must, if these are placed in issue, be evaluated. In Democratic Alliance v President of the Republic of South Africa and Others[20] at para 32, this was explained as follows:

 

... [R]ationality review is really concerned with the evaluation of a relationship between means and ends: the relationship

... between the means employed to achieve a particular purpose on the one hand and the purpose or end itself. The aim of the evaluation of the relationship is not to determine whether some means will achieve the purpose better than others but only whether the means employed are rationally related to the purpose for which the power was conferred. Once there is a rational relationship, an executive decision of the kind with which we are here concerned is constitutional.

 

64        And at paras 39-40 of Democratic Alliance, to which I was pertinently referred in argument:

 

[39]   If in the circumstances of a case, there is a failure to take into account relevant material that failure would constitute part of the means to achieve the purpose for which the power was conferred. And if that failure had an impact on the rationality of the entire process, then the final decision may be rendered irrational and invalid by the irrationality of the process as a whole. There is therefore a three stage enquiry to be made when a court is faced with an executive decision where certain factors were ignored. The first is whether the factors ignored are relevant; the second requires us to consider whether the failure to consider the material concerned (the means) is rationally related to the purpose for which the power was conferred; and the third, which arises only if the answer to the second stage of the enquiry is negative, is whether ignoring relevant facts is of a kind that colours the entire process with irrationality and thus renders the final decision irrational.

[40]   I must explain here that there may rarely be circumstances in which the facts ignored may be strictly relevant but ignoring these facts would not render the entire decision irrational in the sense that the means might nevertheless bear a rational link to the end sought to be achieved. A decision to ignore relevant material that does not render the final decision irrational is of no consequence to the validity of the executive decision. It also follows that if the failure to take into account relevant material is inconsistent with the purpose for which the power was conferred, there can be no rational relationship between the means employed and the purpose.

 

65        The Council is an organ designed, amongst other things, to facilitate the debate upon and resolutions of disputes regarding gambling amongst the national and provincial governments. Its minutes show that a wide range of non-voting members participated in its deliberations. For example, at the meeting on 2 March 2015, there were present officials of the DTI, the various gambling boards, the liquor regulation authorities, tourism authorities and the national treasury were present. Its statutory architecture is designed to promote consensus decisions and the Minister's veto power gives him a special status in the Council. The MECs have a more restricted veto power. as a resolution decided by formal vote requires the support of at least five of the nine provinces.

66         The record shows that the decision at policy level was debated in the Council over several years. I have made the point that the Minister was obliged to consult the Council before he made his decision and the fact that he did so thoroughly and painstakingly cannot be criticised. It is significant, in my view, that those officials present, if any, who had held the view that an increase in the number of licenses to 41 did not press that view or ask that their dissents be noted in the minutes.

67         The Minister ls obliged to consult the Council before making a decision to increase the number of permissible licenses, either nationally or in any province.[21] It is not surprising, at a policy level, that the Minister elected to ensure that he carried the other relevant branches of government with him before he took the question to public comment. Nor was it in any way a secret that he had done so. On 15 May 2015 the Minister published a notice[22] declaring that, having obtained Cabinet approval and consulted the Council, he was publishing the national gambling policy for broader public comment. The policy as published included in para 1.3.2 the proposal that the number of casino licenses be increased to 41 to “resolve the issue relating to the North-West license”.

68         Indeed about a week after the final relevant Council meeting, on 10 March 2015, the Minister met a delegation from CASA and told them that he was considering increasing the maximum number of casino licenses to 41. This prompted CASA to write the letter dated 24 March 2015, to which I referred above in which CAA made the floodgates argument and urged an "empirical study" before a decision was made. The Minister responded to that letter, explaining that the decision was designed to replace the license lost by North West and that while research could be vital in decision making, research cannot replace the decisions actually made by policy makers.

69         In response to the Notice inviting comment. CASA made a further submission to the Minister by letter dated 11 December 2015. The Minister responded by letter dated 2 March 2016. He explained that the addition of the 41^st license was considered "special", that the factors enumerated in s 45 had played an important role in the decision making process, that the recommendations of the two Commissions were not intended to usurp the powers of the Minister in the future and that s 45 was intended to create space for the possible additions of licenses.

70         The Minister thus responded individually to the two submissions made by CASA His reasons given in response to CASA were terse but one must bear in mind that the Minister was addressing an industry insider which he could confidently have expected to know the context in which the reasons were provided. In Koyabe and Others v Minister for Home Affairs and Others (Lawyers for Human Rights as Amicus Curiae)[23] at para 63, it was held:

 

Although the reasons must be sufficient, they need not be specified in minute detail, nor is it necessary to show how every relevant fact weighed in the ultimate finding. What constitutes adequate reasons will therefore vary, depending on the circumstances of the particular case. Ordinarily, reasons will be adequate if a complainant can make out a reasonably substantial case for a ministerial review or an appeal.

 

71         CASA sought additional documentation through the Promotion of Access to Information Act but did not ask for further reasons before it launched the present proceedings. It was well aware of the context in which the decision was made and the documentary information which CASA considered must or ought to have informed it.

72         The Minister explained in his answering affidavit how he came to make the decision. He set out in some detail the sequence of events that led up to the decision. He explained that he took into account the interactions he had had with the North West, the reports presented to his office and included in the review record as supplemented, comments received from bodies such as CASA, the National Gambling Policy report and advice from his own officials.

73         I have mentioned that the record was produced in instalments. Although the Minister and the DTI were criticised for this in the affidavits and heads of argument of CASA, ultimately it was accepted that the documents were indeed before the Minister. Given the wide range of and the time period over which the record accumulated, I do not find it surprising that those responsible for the production of the record had (doubtless on legal advice) to supplement it.

74         The case of North West was undoubtedly special and the Minister cannot be faulted for having decided in principle to use his powers under s 45 to remedy the perceived wrong. Much of the criticism of the Minister's decision making process related to his failure to deal specifically with the factors mentioned in s 45 and the opinions he had received adverse to the decision he was inclined to make.

75         I think that the answer to these criticisms is that an in depth consideration of the important issues raised by s 45 is at this stage premature. The question was whether the number of permissible licenses should be increased by the addition of one more license. Take the serious concern of adverse socio-economic factors as an example: much will depend on the nature of the casino, its location and the regulatory mechanisms which are or can be put in place when the actual casino license itself is applied for. Although a consideration of this factor is mandated by and in the context of s 45 (2){b)(i), all that can really be said at this stage is that the problem is a serious one.

76         Similarly, again taking the same factor as an example, I cannot conceive of how even the most rigorous study would advance the decision maker's understanding of the matter. The same reasoning, in my view, deprives the other criticisms advanced by counsel for CASA of force. While all factors mandated by s 45 and indeed all relevant factors must be considered, the most that can be said at this stage, where the question was whether the Minister should create a single additional license, is that depending on the nature of the individual applications that might flow upon the decision, these factors may, to a greater or lesser degree, play a role in the ultimate decision to grant or refuse a license.

77         Much the same reasoning would apply to the argument that the gambling market is saturated. The proper time to investigate that question is when an individual license is applied for.

78        The floodgates argument seems to me a weak one. If it is inappropriate further to expand the number of available licenses, then the solution is that when the Minister is asked further to exercise his power to increase the number of licenses under s 45, he may legitimately refuse to do so. That the Minister approved the increase of the number to 41 cannot impact on any speculated later decision making.

79         The weight to be attached to each individual factor is generally for the executive decision maker to determine. I do not think that it has been shown that the Minister failed to give a rational quantum of consideration to any of the factors enumerated in s45 of the 2004 Act or that the Minister failed to take relevant material into account.

80         It follows that none of the grounds of review should succeed. The application must be dismissed.

81         Finally, as to costs: in my view the Biowatch principle must be applied. Although I have non-suited CASA, it cannot by any stretch be suggested that CASA acted inappropriately either in bring the review or in the manner in which it conducted the litigation. The application to amplify the record was not argued and its costs should therefore be in the cause. I shall accordingly make no order as to costs.

82         I make the following order:

The application is dismissed. There will be no order as to costs.

 

 

NB Tuchten

Judge of the High Court

10 August 2018

 

---