THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case no: 89/2021

In the matter between:
TSOGO SUN CALEDON (PTY) LTD                                      FIRST APPELLANT
WEST COAST LEISURE (PTY) LTD                                     SECOND APPELLANT
GARDEN ROUTE CASINO (PTY) LTD                                    THIRD APPELLANT
VUKANI GAMING WESTERN CAPE (PTY) LTD         FOURTH APPELLANT

and

WESTERN CAPE GAMBLING AND RACING
BOARD                                                                                     FIRST RESPONDENT
CHAIRPERSON OF THE WESTERN CAPE
GAMBLING AND RACING BOARD                                   SECOND RESPONDENT

Neutral citation: Tsogo Sun Caledon (Pty) Ltd and Others v Western Cape
Gambling and Racing Board and Another (Case no 89/2021)
[2022] ZASCA 102 (24 June 2022)

Coram:
PETSE DP and ZONDI, GORVEN and MABINDLA-BOQWANA
JJA and MUSI AJA
Heard:
24 May 2022
Delivered: 24 June 2022
Summary: Administrative law – review – principle of legality – imposition of
conditions of licences – condition that licensee must maintain a level 4 broad-based
black economic empowerment certification – jurisdictional facts giving rise to power
to impose such condition not satisfied – absent jurisdictional facts Board not
empowered to impose impugned conditions – decision set aside on review.

__________________________________________________________________
ORDER
______________________________________________________________________________
On appeal from: Western Cape Division of the High Court, Cape Town, Martin AJ
sitting as court of first instance:
The appeal is upheld with costs, including the costs consequent on the
employment of two counsel where so employed, such costs to be paid jointly and
severally by the respondents, the one paying, the other to be absolved.
The order of the court a quo is set aside and substituted with the following:
‘1
It is declared that the following decisions of the first respondent are
unlawful and invalid:
1.1
the decision to impose the licence condition contained in paragraph 6.2
of its letter dated 13 July 2017 on the first applicant’s Casino Operator
Licence;
1.2
the decision to impose the licence condition contained in paragraph 6.2
of its letter dated 13 July 2017 on the second applicant’s Casino
Operator Licence;
1.3
the decision to impose the licence condition contained in paragraph 6.2
of its letter dated 13 July 2017 on the third applicant’s Casino Operator
Licence;
1.4
the decision to impose the licence condition contained in paragraph 6.2
of its letter dated 13 July 2017 on the fourth applicant’s Route Operator
Licence.
The decisions of the first respondent referred to in paragraphs 1.1 to 1.4
hereof are reviewed and set aside.

The costs of the application are to be paid by the respondents, including
the costs consequent on the employment of two counsel where so
employed, such costs to be paid jointly and severally by the
respondents, the one paying, the other to be absolved.’
The Registrar of this Court is directed to send a copy of this judgment to the
Judge President of the Gauteng Division of the High Court, Pretoria, for him to take
the steps contemplated in paragraph 26 of this judgment.

__________________________________________________________________
JUDGMENT
__________________________________________________________________
Gorven JA (Petse DP and Zondi and Mabindla-Boqwana JJA and Musi AJA
concurring)

[1] At all relevant times, the first to third appellants held casino licences
authorising them to operate casinos in the Western Cape. The fourth appellant held
a route operator licence by which it was authorised to operate a limited payout
machine business in that province. I shall refer to them collectively as the appellants
since all parties agreed that the facts and law apply equally to them. All of the
licences were subject to conditions imposed by the Western Cape Gambling and
Racing Board (the Board) under the applicable Broad-Based Black Economic
Empowerment (B-BBEE) framework.1 The licences are renewable annually. On
13 July 2017, the Board wrote to the appellants indicating that it had decided to

1 This refers to the Broad-Based Black Economic Empowerment Codes promulgated under the Broad-Based Black
Economic Empowerment Act 53 of 2003 (the B-BBEE Act).

impose new conditions in respect of those licences. In short, the conditions required
the appellants to ‘achieve an overall rating of Level 4 in terms of the Tourism
Scorecard’ and to submit documentation related to this to the Board (the conditions).
It is common cause that this requires the appellants to achieve and maintain a Level
4 status under the B-BBEE framework.

[2] The imposition of the conditions was an amendment to the conditions subject
to which the appellants had previously held their licences. It is as well to set out in
full the conditions imposed:
‘6.1
In respect of the promotion of Broad-Based Black Economic Empowerment (“BBBEE”)
the licence holder shall, within the context of its licensed operations, comply with such
requirements and/or implement such measures as may be required, stipulated or approved by the
Board from time to time pertaining to –
(i)
the submission of quarterly reports to the relevant Committee of the Board, in such
format and at such intervals as it may specify or require, in connection with its corporate
profile, initiatives implemented, commitments proposed or made and/or its compliance
with legislation or the conditions imposed by the Board;
(ii)
the attendance of such meetings of the relevant Committee(s) of the Board at such
times or intervals determined by the said committee;
(iii)
the conduct of such scheduled and/or ad hoc audits as the relevant Committee or
the Board may require in relation to any aspect of the BBBEE in relation to its licensed
operations; and
(iv)
generally ensuring compliance with the elements and objectives of the Codes of
Good Practice on BBBEE and the BBBEE Act, 2003, as amended from time to time and
such further conditions as the Board may, in consultation with the licence holder, impose.
6.2
The licence holder shall achieve an overall rating of Level 4 in terms of the Tourism
Scorecard, and shall in this regard:
(i)
Submit to the Board, 3 calendar months before the expiry date of its licence, a
BBBEE rating verification certificate which is not older than 12 months, from an accredited
institution, along with its renewal application of the relevant licence.

(ii)
Should the licence holder fail to achieve the Compliance Level prescribed above,
it shall submit to the Office of the Board within 3 calendar months before the expiry date
of its licence, a plan setting out how the required the BBBEE compliance level will be
achieved.
(iii)
In the event that the licence holder achieved the required BBBEE compliance level,
it shall submit to the Office of the Board within 3 calendar months before the expiry date
of its licence, a plan setting out its objectives to improve its current BBBEE level and status.
6.3
The licence holder shall ensure that CSI projects have emphasis on local delivery, with
specific focus on local job creation (direct or indirect) and/or entrepreneurial local endeavours.
This will be monitored through the relevant Committee of the Board.
6.4
The licence holder shall endeavour to focus on local (Western Cape) procurement and such
procurement will be monitored by the relevant Committee of the Board.
6.5
The Board will annually review the BBBEE conditions and compliance therewith in terms
of section 53 of the NGA.’2

[3] The appellants regarded sub-paragraph 6.2 of the Board’s decision as
unlawful for four reasons:
(a)
The Board was not empowered in terms of the National Gambling Act 7 of
2004 (the National Act) or the Western Cape Gambling and Racing Act 4 of 1996
(the Western Cape Act) to impose those conditions.
(b)
Even if the Board was so empowered, the jurisdictional facts for the exercise
of that power were not satisfied and the power accordingly did not arise.
(c)
The Board’s decision to impose the Level 4 conditions involved an unlawful
‘one size fits all’ industry-wide condition, without regard to the specific
circumstances of the appellants. As a result, the discretion of the Board had been
fettered by rigidity.
(d)
The Board’s decision was unreasonable.

2 Emphasis in the original.

[4] The appellants accordingly approached the Western Cape Division of the
High Court, Cape Town (the high court) by way of application. They sought to
review and set aside the decision of the Board to impose the condition in
paragraph 6.2 (the impugned decision) on those four bases. The high court, per
Martin AJ, dismissed the application with costs but granted the appellants leave to
appeal to this Court.

[5] The Tsogo Sun group of companies, of which the appellants are part, has been
commended by the Board for its voluntary commitment to the B-BBEE framework.
The first three appellants improved their status to a level 1 status between 2010 and
2018. The fourth appellant improved from level 3 to level 2 in 2017. During this
period, the codes governing the scoring of casinos were twice made more stringent.
The levels run from level 1 to level 8. It should be noted that level 4 is a less exacting
compliance level than levels 1, 2 or 3. In other words, prior to the impugned decision,
the appellants had voluntarily far exceeded the level which the Board sought to
impose in the conditions. This much is uncontested. In addition, by the time the
replying affidavit was delivered, all four of the appellants had achieved a level 1
status. The achievement of this status was not in any way motivated by, or a result
of, the imposition of the conditions. The appellants asserted, without contradiction,
that they supported the necessity for empowerment pursuant to the B-BBEE Act.
What is clear from the above is that this assertion was amply confirmed by their
actions.

[6] Some feature of the licences and submissions leading to the impugned
decision forms a necessary backdrop to the issues in this appeal.

(a)
According to s 40 of the Western Cape Act, licences are valid for a period of
12 months and issued annually. A licensee must apply annually for the renewal of
the licence, 90 days before it expires.
(b)
The B-BBEE Act was not in force when the licences were first issued. The
initial conditions contained a requirement that various percentages of previously
disadvantaged persons be employed in certain positions.
(c)
After the B-BBEE Act came into effect, Codes of Good Practice were
adopted, first in 2007 and then in 2013.
(d)
In 2009, the Board, along with Boards in other provinces, sought to impose
new conditions concerning levels of compliance with the B-BBEE framework. The
appellants challenged these in various provinces, including the Western Cape. This
has no bearing on the outcome of the present matter but will be adverted to later.

[7] In 2015, the 2013 Codes of Good Practice came into effect. As a result, the
Board indicated to all licence holders that it intended to impose new licence
conditions relating to the maintenance of a particular B-BBEE status. The first three
appellants made representations concerning this in September 2016. They contended
that to impose an industry-wide condition would be unlawful and that the B-BBEE
status of each licensee should be separately evaluated. They proposed an alternative
condition in the following terms:
‘In order to enable the Board to monitor the progress of [the appellants] in relation to broad based
black economic empowerment (BBBEE) each of the three casinos shall submit annually to the
Board:
(a)
A report on its performance in relation to BBBEE for the preceding year; and
(b)
Its plan in relation to BBBEE for the forthcoming year.’
This, they submitted, would enable the Board to monitor the performance of the
appellants and address any shortcomings. There is nothing in the record showing

that the Board considered these proposals. On 13 October 2016, an ad-hoc
committee of the Board recommended that licensees be given the opportunity to be
rated on an individual basis. This was followed up by the Board CEO suggesting
that, instead of the proposed level 4 condition, ‘the imposition of an appropriate
level’ should be arrived at after consultation with each licence holder. The Board
adopted these two suggestions. Despite this, on 29 May 2017, the CEO of the Board
suggested that, since all casinos and route operators had achieved at least a level 4
rating, that requirement could be ‘maintained for the final licence condition’. This
about turn led to the impugned decision by the Board to impose the conditions.

[8] The same conditions were imposed on the fourth appellant, but with a rating
against a ‘generic scorecard’ applicable to route operators. The Board has justified
this approach on the basis that it ‘ensures uniformity in approach and also allows for
a coherent and sustainable position’ and because a level 4 condition is a mid-level
status which, it says, can be maintained by all licensees.

[9] There is no dispute that decisions of the Board amount to administrative action
under the Promotion of Administrative Justice Act 3 of 2000 (PAJA). This means
that such decisions are susceptible of review under both PAJA and the principle of
legality. As to the latter, it is trite that the Board, being a statutory body, is limited
to the powers accorded to it in legislation. If an entity exceeds the powers accorded
it in making a decision, the decision is unlawful. It has no power to make the decision
and such decision would be ultra vires (beyond its powers). The underlying principle
was explained in Fedsure Life Assurance Ltd and Others v Greater Johannesburg
Transitional Metropolitan Council and Others:3

3 Fedsure Life Assurance Ltd and Others v Greater Johannesburg Transitional Metropolitan Council and Others
[1998] ZACC 17; 1999 (1) SA 374 (CC); 1998 (12) BCLR 1458 (CC) para 58.

‘It seems central to the conception of our constitutional order that the legislature and executive in
every sphere are constrained by the principle that they may exercise no power and perform no
function beyond that conferred upon them by law.’

[10] There is likewise no dispute that the Board is the statutory provincial licensing
authority for the Western Cape. As such, any powers to impose conditions derive
from either or both of the National Act and the Western Cape Act. The appellants
indicated at the hearing that they no longer persisted in challenging the power of the
Board to impose conditions at all. This concession is well made. The first basis on
which they submitted that the impugned decision was unlawful therefore falls away.
The nub of the argument on the legality of the impugned decision was whether the
requirements for the exercise of the power to impose the conditions on the appellants
arose in the present matter. This brings into focus the second basis for the review
mentioned above.

[11] The parties agreed that the power to impose the conditions arises from s 53(2)
of the National Act, which provides:
‘(1) When considering an application for a licence, other than an employment licence, or when
considering an application for the transfer of a licence, a provincial licensing authority-
(a)   must consider the commitments, if any, made by the applicant or proposed transferee in
relation to-
(i)    black economic empowerment; or
(ii)   combating the incidence of addictive and compulsive gambling;
(b)   must consider the potential socio-economic impact on the community of the proposed
licence; and
(c)   may impose reasonable and justifiable conditions on the licence to the extent necessary to
address the matters referred to in paragraphs (a) and (b).
(2) At least once every year after the issuance of a licence other than an employment licence, the
provincial licensing authority that issued that licence-

(a)   must review the commitments considered in terms of subsection (1)(a) and the achievements
of the licensee in relation to those commitments; and
(b)   may impose further or different reasonable and justifiable conditions on the licence to the
extent necessary to address the matters referred to in subsection (1)(a) and (b).’

[12] In order to determine whether the Board acted within the powers accorded to
it by s 53(2), it is necessary to construe that section. The approach to do so is now
well established:
‘The “inevitable point of departure is the language of the provision itself”, read in context and
having regard to the purpose of the provision and the background to the preparation and production
of the document.’4
Put another way, but to similar effect:
‘Whilst the starting point remains the words of the document, which are the only relevant medium
through which the parties have expressed their contractual intentions, the process of interpretation
does not stop at a perceived literal meaning of those words, but considers them in the light of all
relevant and admissible context, including the circumstances in which the document came into
being. The former distinction between permissible background and surrounding circumstances,
never very clear, has fallen away. Interpretation is no longer a process that occurs in stages but is
“essentially one unitary exercise”.’5

[13] Section 53(2)(b) empowers the Board to ‘impose further or different
reasonable and justifiable conditions . . . to the extent necessary to address the
matters referred to in subsection (1)(a) and (b)’. This means that the Board is
empowered only to impose conditions ‘to the extent necessary to address the matters
referred to in subsection (1)(a) and (b)’. Prior to doing so, the Board must consider
the commitments previously made by the appellants relating to black economic

4 Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] ZASCA 13; 2012 (4) SA 593 (SCA); [2012]
2 All SA 262 (SCA) para 18.
5 Bothma-Batho Transport (Edms) Bpk v S Bothma & Seun Transport (Edms) Bpk [2013] ZASCA 176; [2014] 1 All
SA 517 (SCA); 2014 (2) SA 494 (SCA) para 12.

empowerment. It must then ‘review the . . . achievements of the licensee in relation
to those commitments’.

[14] On construction, there is a four-stage process which must take place in
imposing further or different conditions arises under s 53(2):
(a)
It must first consider the previous commitments of the licensee regarding
black economic empowerment;6
(b)
It must then review the achievements of the licensee in relation to those
commitments;
(c)
A discretion then arises whether, in the light of these two factors, further or
different conditions should be imposed on the licensee;
(d)
If so, the power to impose such conditions is limited in that:
(i)
The further or different conditions must be reasonable and justifiable;
and
(ii)
The further or different reasonable and justifiable conditions must be
imposed only to the extent that is necessary to address the matters set
out in s 53(1)(a) and (b) of the National Act.

[15] This is clearly a focused exercise geared to each individual licensee. It
requires each licensee to be evaluated separately. It cannot be said that the
commitments and achievements of a licensee have been evaluated if the conditions
are blanket ones imposed on all licensees. Only if an individual evaluation has been
undertaken, can it be said that the power to impose further or different conditions
arises. Even if so, the conditions must be reasonable and justifiable and tailored to
each licensee to address any shortcomings and only to the extent necessary to do so.

6 I deal only with the question of black economic empowerment since the conditions address only this and not the
other issues referred to in ss 53(1)(a) and (b).

What is glaringly obvious from this interpretation is that it is insufficient for the
Board to impose further or different conditions on all the licensees without
undertaking an evaluation of each licence holder. The required exercise differs
entirely from that appropriate to the adoption of a general policy.

[16] In Kemp NO and Others v Dr J J H van Wyk and Others,7 this Court set out
the approach a decision maker should take to the application of a policy to specific
cases. Here, the Director of Animal Health was given the discretion to grant or refuse
permits to import certain animals to South Africa. The appellants applied for such a
permit in conditions where, about a year before applying, an embargo on the
importation of such animals had been imposed in order to control the spread of foot-
and-mouth disease. The appellants motivated their application on the basis that they
would take sufficient steps to prevent any such spread. Their application was refused
and they sought to review this refusal. They contended that the Director had failed
to exercise a discretion at all and had simply applied the embargo. This Court held:
‘[The Director] was entitled to evaluate the application in the light of the directorate’s existing
policy and, provided that he was independently satisfied that the policy was appropriate to the
particular case, and did not consider it to be a rule to which he was bound, I do not think it can be
said that he failed to exercise his discretion.’8
Applying these principles to the facts, the conclusion was:
‘In the present case it cannot be said that the first respondent considered himself bound to refuse
the permit because of the existence of the embargo. His evidence establishes sufficiently that he
indeed evaluated the application and concluded independently that the embargo was appropriate
to the particular case.’9

7 Kemp NO and Others v Dr J J H van Wyk and Others [2005] ZASCA 77; [2008] 1 All SA 17 (SCA).
8 Ibid para 10.
9 Ibid 11.

[17] This establishes the principle that, where an entity is given a discretion, it may
validly develop a policy relating to that discretion. If such a policy exists, the
decision maker must nevertheless evaluate whether it is appropriate to apply the
policy in the circumstances of individual cases. If this is not done, no discretion is
exercised and the decision would be susceptible of review. In the present matter, it
may well be, for example, that the Board was entitled to adopt a policy that all
licensees should achieve a level 4 status. When applying this policy, however,
s 53(2) requires a separate evaluation of each licensee as set out above. If the
commitments and achievements of a particular licensee do not require further or
different conditions to be imposed, the power to do so does not arise. An example
might be where a licensee has consistently exceeded the policy minimum and met
its own commitments. Since an annual report must be submitted by all licensees, the
risk of the policy not being implemented or effective in such a case would be
negligible and, if the licensee does not measure up, this could be addressed in the
review under s 53(2) which the Board must undertake at least annually.

[18] What is meant by the criterion of necessity was clarified in Minister of
Finance v Afribusiness NPC.10 Here the Constitutional Court considered the power
to promulgate regulations under the Preferential Procurement Policy Framework
Act 5 of 2000. Section 5 of that Act empowered the Minister to ‘make regulations
regarding any matter that may be necessary or expedient to prescribe in order to
achieve the objects of the Act’. The majority judgment held that:
‘What the first judgment identifies as the “only restriction” on the Minister’s power has the effect
of attaching no or little meaning to “necessary or expedient”. This inverts the provisions of the
section because the two words – “necessary” and “expedient” – are, in fact, the limiting factor, not

10 Minister of Finance v Afribusiness NPC [2022] ZACC 4.

what the first judgment identifies as the “only restriction”. A regulation that does not meet the
threshold of necessity or expedience is invalid for being ultra vires the empowering section.’11
In the present matter, the power of the Board is limited to imposing conditions only
‘to the extent necessary to address the matters referred to in subsection (1)(a)
and (b)’.

[19] The reasons given by the Board for arriving at the impugned decision must
now be considered. This Court has set out why this is important:
‘The duty to give reasons for an administrative decision is a central element of the constitutional
duty to act fairly. And the failure to give reasons, which includes proper or adequate reasons,
should ordinarily render the disputed decision reviewable. In England the courts have said that
such a decision would ordinarily be void and cannot be validated by different reasons given
afterwards — even if they show that the original decision may have been justified. For in truth the
later reasons are not the true reasons for the decision, but rather an ex post facto rationalisation of
a bad decision. Whether or not our law also demands the same approach as the English courts do
is not a matter I need strictly decide.’12
The Constitutional Court later commented on the question left open in this passage:
‘It is true that reasons formulated after a decision has been made cannot be relied upon to render a
decision rational, reasonable and lawful. However, a report by an expert will not necessarily
constitute ex post facto (after the fact) reasons; it may merely explain the rationale of the reasons
that were provided prior to the making of the decision.’13
What is clear from this passage is that ex post facto reasons must be excluded from
consideration. These are reasons which did not form the basis for the decision at the
time but are subsequently formulated to meet the attack of a reviewing applicant. Of
course, it is not always easy to distinguish the two. It is safe to say, however, that

11 Ibid para 108.
12 National Lotteries Board and Others v South African Education and Environment Project  [2011] ZASCA 154 2012
(4) SA 504 (SCA) para 27 (references omitted).
13 National Energy Regulator of South Africa and Another v PG Group (Pty) Ltd and Others [2019] ZACC 28; 2020
(1) SA 450 (CC) para 39 (references omitted).

reasons which motivated the decision at the time must form the basis for the
evaluation by a court.

[20] In the present matter, no such difficulty arises. This is simply because none of
the reasons given in any way take account of the specific commitments or
performance of the appellants as regards their approach to B-BBEE. This much was
conceded in argument. The reasons in both the letter responding to the initial
challenge to the impugned decision and in the answering affidavit address industry-
wide considerations only. In other words, they are more suited to the adoption of a
policy rather than to the application of a policy to the specific circumstances or
performance of the individual appellants as envisaged by s 53(2).

[21] Some examples will suffice. In the initial reasons, the Board set out its
‘engagements with the industry’. These included letters to ‘all licence holders’ at
various points in the process, ‘industry consultation on proposed licence conditions’,
the adoption by the Board of ‘the new draft licence conditions’ and opportunities for
licence holders to make representations concerning ‘the proposed conditions of
licence’ at special Committee meetings. After giving licence holders a deadline to
submit ‘BBBEE verification certificates’, the Board made the impugned decision on
21 June 2017 ‘to approve the final new BBBEE licence conditions to be imposed on
licence holders’. It was accepted in argument that the same conditions were imposed
on every licence holder. There is not one mention of any licence holder having been
individually evaluated. Nor is there any mention of a consideration of whether
requiring a level 4 status necessitated further or different conditions to be imposed
on the respective appellants.

[22] The approach taken to the impugned decision was then followed by
paragraph 6 setting out the reasons for the decision. It is worth quoting parts of this
paragraph:
‘6.1   Since inception of the initial conditions imposed since 2009, compliance with the BBBEE
conditions is monitored by the different Committees of the Board.
6.2      With the adoption of the 2013 Codes of Good Practice, the then operative 2007 Codes were
replaced by the 2013 Codes, which took effect on 1 May 2015.
6.3     Therefore, at the March 2015 Board meeting, the Board resolved that it will commence a
consultation process with the industry and recommend a draft level 3 in terms of the 2013 Codes.
The intention at the time was for the new conditions to take effect one year after the adoption of
the Revised Codes . . .
6.4      In determining the final conditions to be imposed on the industry, the Board considered all
written and oral submissions of licence holders.’
One further paragraph of the reasons is worth quoting:
‘6.15    The Board is fully cognisant of and appreciates the fact that the Revised Codes and
particularly the Tourism Codes are more stringent compared to the initial Codes of Good Practice.
Hence, the Board will be adopting a progressive approach, taking into account the current BBBEE
compliance level of each licence holder, their unique, individual business plans and circumstances
in arriving at reasonable and justifiable conditions that will be imposed as deemed necessary and
appropriate.’
This latter sub-paragraph shows that the approach set out under s 53(2) did not take
place prior to the impugned decision but was one which would only be employed by
the Board thereafter. Had this been done at the time, the conduct of the Board may
well have complied with s 53(2). Throughout the reasons given, however, there is
no indication that account was taken of the ‘compliance level of each licence holder,
the unique, individual business plans and circumstances’ of specific licensees in
arriving at the impugned decision.

[23] In the answering affidavit, seven reasons were given to counter the assertion
by the appellants that, given their achievements in respect of B-BBEE the imposition
of the conditions was neither necessary nor expedient. Again, it will be helpful to
quote these in full:
‘59.1   First, irrespective of an entity’s achievements in relation to B-BBEE, it lacks any relevance
to the granting of a licence or the renewal thereof unless it is imposed as a condition for the granting
of a licence.
59.2   Second, imposing such a condition is a key feature to enforcing transformation to the
gambling industry. By imposing conditions relating to compliance with certain B-BBEE
requirements, the objective is to shift the significance thereof from a “nice to have” to a directly
enforceable obligation aimed at transforming the industry and holding licence holders to account
in respect thereof.
59.3   Third, unless imposed as a condition the Board has little recourse in the event that entities
regress in respect of the empowerment credentials. The condition accordingly allows for a means
of controlling and evaluating the process.
59.4   Fourth, the gambling industry, as with many other sectors in South Africa still has a long
way to go in order to achieve proper transformation. This justifies the necessity of the condition.
59.5   Fifth, the condition as imposed will advance the economy of the Western Cape.
59.6  Sixth, it is precisely in order to cater for a change of circumstances that Condition 6.1.
provides for a regular reporting obligation.
59.7   Seventh, the condition allows for an objective determination by an external agency; this
facilitates the fairness of the process.’14
Once again, none of the reasons advanced targets any of the specific appellants. All
relate to the industry as a whole.

[24] All of these reasons would be valid if they were focused on developing policy.
As has been mentioned above, the development of policy is unobjectionable. What
is problematic is when the policy is applied in a blanket fashion and no evaluation

14 Emphases in the original.

takes place as to whether it should be applied to individual licence holders in the
light of their commitments and achievements. In Kemp NO v Van Wyk,15 Nugent JA
explained of a decision-maker:
‘A public official who is vested with a discretion must exercise it with an open mind but not
necessarily a mind that is untrammelled by existing principles or policy. In some cases, the
enabling statute may require that to be done, either expressly or by implication from the nature of
the particular discretion, but generally, there can be no objection to an official exercising a
discretion in accordance with an existing policy if he or she is independently satisfied that the
policy is appropriate to the circumstances of the particular case. What is required is only that he or
she does not elevate principles or policies into rules that are considered to be binding with the
result that no discretion is exercised at all. Those principles emerge from the decision of this Court
in Britten and Others v Pope 1916 AD 150 and remain applicable today.’
Sadly, the Board appears to have elevated what is really a policy into an immutable
rule which it applied indiscriminately to all licence holders regardless of their
circumstances.

[25] As has been shown above, that approach is impermissible as a basis for
imposing further or different conditions under s 53(2). The Board nowhere showed
that it undertook any of the stages of the four-stage process mentioned above which
gives effect to the provisions of s 53(2). It is clear that, even if it could be said that
a discretion arose, none was exercised at all. As such, it is clear that the power of the
Board to impose further or different conditions on the appellants did not arise. For
the same reason, the Board could also not show that the conditions were reasonable
and justifiable or had been imposed only to the extent necessary to address the
commitments and achievements of the appellants, since these were not considered.
Accordingly, the jurisdictional facts which give rise to the power of the Board to

15 Footnote 7 para 1.

impose the conditions were clearly not satisfied. The imposition of the conditions
was therefore unlawful. It follows that it is unnecessary to consider the other two
bases relied upon by the appellants in attacking the impugned decision. The
conditions fall to be reviewed and set aside.

[26] It remains to mention a singularly unpleasant matter. As mentioned above, in
2009, the Board and other provincial licensing authorities had also sought to amend
existing conditions. The decision of the Mpumalanga Board was taken on review by
the appellants in the Gauteng Division of the High Court, Pretoria. That taken by the
first respondent herein was challenged but it was agreed that the challenge would be
held in abeyance pending the outcome of the application in the Gauteng Division.
We were informed by counsel on both sides that the application was heard in 2016
and judgment reserved. The judgment remains outstanding. Taking counsel at their
word, as we must, absent any indications to the contrary, this is a state of affairs to
be strongly deprecated. In the milieu of service delivery, the service required of
courts by the Constitution is to hear matters, decide them and render reasoned
judgments for the decision, and to do all of this within a reasonable period of time.
One can hardly conceive that this service has been rendered in the review arising
from the 2009 conditions. It is directed that this matter be brought to the attention of
the Judge President of the relevant division with a view to reporting it to the Judicial
Conduct Committee of the Judicial Service Commission for consideration of the
conduct of the judicial officer or officers responsible for this lamentable state of
affairs in that matter.

[27] The present matter involved some degree of complexity. Although the
appellants employed three, and the respondents two, counsel lead counsel for the

appellants readily accepted that costs of three counsel would not be warranted. Thus,
the costs of two counsel should be allowed on appeal.

[28] In the result:
The appeal is upheld with costs, including the costs consequent on the
employment of two counsel where so employed, such costs to be paid jointly and
severally by the respondents, the one paying, the other to be absolved.
The order of the court a quo is set aside and substituted with the following:
‘1
It is declared that the following decisions of the first respondent are
unlawful and invalid:
1.1
the decision to impose the licence condition contained in paragraph 6.2
of its letter dated 13 July 2017 on the first applicant’s Casino Operator
Licence;
1.2
the decision to impose the licence condition contained in paragraph 6.2
of its letter dated 13 July 2017 on the second applicant’s Casino Operator
Licence;
1.3
the decision to impose the licence condition contained in paragraph 6.2
of its letter dated 13 July 2017 on the third applicant’s Casino Operator
Licence;
1.4
the decision to impose the licence condition contained in paragraph 6.2
of its letter dated 13 July 2017 on the fourth applicant’s Route Operator
Licence.
The decisions of the first respondent referred to in paragraphs 1.1 to 1.4
hereof are reviewed and set aside.
The costs of the application are to be paid by the respondents, including
the costs consequent on the employment of two counsel where so employed,

such costs to be paid jointly and severally by the respondents, the one paying,
the other to be absolved.’
The Registrar of this Court is directed to send a copy of this judgment to the
Judge President of the Gauteng Division of the High Court, Pretoria, for him to take
the steps contemplated in paragraph 26 of this judgment.

____________________
T R GORVEN
JUDGE OF APPEAL

Appearances
For appellants:

S Budlender SC (with him L Kelly and

M Mokhoaetsi)
Instructed by:

Edward Nathan Sonnenbergs Incorporated,

Cape Town

Lovius Block Incorporated, Bloemfontein

For respondents:

K Pillay SC (with her T Sarkas)
Instructed by:

Abrahams Kiewitz Incorporated, Cape Town

Webbers Attorneys, Bloemfontein
THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From:
The Registrar, Supreme Court of Appeal
Date:
24 June 2022
Status:
Immediate

Please note that the media summary is intended for the benefit of the media and
does not form part of the judgment of the Supreme Court of Appeal.

Tsogo Sun Caledon (Pty) Ltd and Others v Western Cape Gambling and Racing
Board and Another [2022] ZASCA 102

Today the Supreme Court of Appeal upheld an appeal with costs of two counsel
against an order of the Western Cape Division of the High Court, Cape Town (per
Martin AJ). The high court dismissed an application by Tsogo Sun Caledon (Pty) Ltd
and its associated companies (the Tsogo group) to review a decision of the Western
Cape Gambling and Racing Board (the Board) and the Chairperson thereof.

The Tsogo group held casino and route operator licences authorising them to
conduct certain gambling operations in the Western Cape. All of the licences were
subject to conditions imposed by the Board under the applicable Broad-Based Black
Economic Empowerment (B-BBEE) framework. The Tsogo group had voluntarily
achieved level 1 or 2 B-BBEE ratings and been commended for this commitment by
the Board. After industry-wide consultation, the Board decided to amend the B-BBEE
conditions to require all licensees to attain and maintain a level 4 B-BBEE rating.
This is a lower rating than that which was held by the Tsogo group. Tsogo contended
that this decision (the impugned decision) was made ultra vires the powers accorded
to the Board because the jurisdictional facts giving rise to that power had not been

satisfied.

The SCA held that s 53(2)(b) of the National Gambling Act 7 of 2004 empowers the
Board to ‘impose further or different reasonable and justifiable conditions . . . to the
extent necessary to address’ the commitments and achievements of the licensee
relating to B-BBEE matters. Prior to imposing conditions, the Board must assess the
commitments previously made and must then review the achievements of the
licensee in relation to those commitments. If those do not measure up, the Board is
then empowered to impose conditions but only ‘to the extent necessary to address’
the shortcomings of the licensee regarding B-BBEE matters. This, the SCA held,
requires evaluation of individual licensees before the power to impose further or
different conditions arises.

In the present matter the Board had not considered the commitments or
achievements of any of the Tsogo group but adopted what would better be
understood as a policy and applied it in a blanket fashion to all licensees. Whilst it
was permissible to adopt a policy, it was necessary to assess each licensee
individually and then consider whether the policy should be applied to that licensee.
Since the Board did not assess the Tsogo group individually, the jurisdictional facts
necessary for the power to impose those conditions were not satisfied. As a result,
the Board had no power to impose those conditions on the Tsogo group. The
impugned decision should have been reviewed and set aside by the high court. The
SCA therefore upheld the appeal and substituted an order reviewing and setting
aside the impugned decision, allowing the costs of two counsel.