THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Not Reportable
Case no: 624/22 and 630/22
In the matter between:

LOTTOSTAR (PTY) LTD
FIRST APPELLANT
MPUMALANGA GAMBLING BOARD
SECOND APPELLANT
HOLLYWOOD SPORTSBOOK
(PARTY SEEKING LEAVE

TO INTERVENE AS THE

THIRD APPELLANT)

and

ITHUBA HOLDINGS (PTY) LTD
FIRST RESPONDENT
NATIONAL LOTTERIES COMMISSION
SECOND RESPONDENT
BETTING WORLD (PTY) LTD
THIRD RESPONDENT
NATIONAL GAMBLING BOARD
(PARTY SEEKING LEAVE

TO INTERVENE AS THE

FOURTH RESPONDENT)

Neutral citation:
LOTTOSTAR (PTY) LTD and OTHERS v ITHUBA HOLDINGS
(PTY) LTD and OTHERS (Case no 624/22 and 630/22) [2023]
ZASCA 119 (5 September 2023)
Coram:
PONNAN,
SALDULKER,
WEINER
and
GOOSEN
JJA
and
UNTERHALTER AJA
Heard:
18 August 2023
Delivered:
5 September 2023
Summary:
Parties – joinder – to avoid causing unnecessary expense and delay and
for expedience – court on appeal issuing directions as to future course of the appeal.

___________________________________________________________________
On appeal from: Mpumalanga Division of the High Court, Mbombela (Mashile J and
Roelofse AJ, sitting as a full court):
___________________________________________________________________

JUDGMENT
___________________________________________________________________
Ponnan JA (Saldulker, Weiner and Goosen JJA and Unterhalter AJAconcurring):
[1] At the outset of the hearing on 18 August 2023, counsel were required to
address argument on a preliminary question: namely, whether it was open to us to
enter into the merits and make an order on appeal, absent the joinder of certain other
parties, who, so the appellants contended, have an interest in the result of these
proceedings.

[2] The question arises for consideration against the following factual backdrop:
The second respondent in the appeal, the National Lotteries Commission (the NLC),
was established by s 2 of the Lotteries Act 57 of 1997 (the Lotteries Act). The first
respondent, Ithuba Holdings (Proprietary) Limited (RF) (Ithuba), holds an exclusive
licence to operate the National Lottery in terms of s 13 of that Act. In October 2016,
the NLC, supported by Ithuba, brought an application against the first appellant,
Lottostar (Pty) Limited (Lottostar), in the Mpumalanga High Court, Mbombela (the high
court) for a declaratory order that the arrangement pursuant to which Lottostar offers
bets on lotteries is illegal and occurs in contravention of s 57(2)(g) of the Lotteries Act.

[3] By virtue of a bookmaker licence issued in terms of s 32B of the Mpumalanga
Gambling Act 5 of 1999 by the second appellant, the Mpumalanga Gambling Board
(the MGB), Lottostar was authorised to conduct the business of a bookmaker in the

Province of Mpumalanga. Relying on the terms of the licence, Lottostar has been
laying or taking fixed-odd bets on the outcome of lotteries. Contending that the licence
did not authorise Lottostar to lay or take fixed-odd bets or indeed any other bets on
lotteries, the NLC and Ithuba sought an order in the following terms:
‘1.
Declaring that the first respondent’s scheme, plan arrangement or system whereby it
offers bets, whether or not of a fixed-odd nature, on the outcome of lotteries is unlawful.
2.
Interdicting the first respondent from offering bets, whether or not of a fixed-odd nature,
on the outcome of any lottery.’

[4] The application was opposed by Lottostar. The MGB took the view that it was
‘enjoined to make relevant submissions to assist the Court in adjudicating [the]
application’. It accordingly filed an answering affidavit and opposed the grant of the
relief sought. During April 2017, the third respondent, Betting World (Pty) Ltd (Betting
World), successfully applied to intervene as a respondent in the application on the
basis that if the relief in prayer 1 were to be granted, it would have a direct and material
impact on its rights and interests.

[5] Although various grounds were raised in opposition to the application, the high
court (per Mphahlele J) confined itself to only one in limine point – namely, that the
NLC had failed to comply with s 41 of the Constitution, as also the Intergovernmental
Relations Framework Act 13 of 2005. On 15 May 2019, Mphahlele J upheld the point
and issued the following order:
‘The parties are hereby directed to take the necessary steps, as contemplated in
section 41(3) of the Constitution read with the provisions of the Intergovernmental
Relations Framework Act, to resolve the dispute in consultation with the Minister of
Trade and Industry.’

[6] The NLC and Ithuba sought leave to appeal against the order of Mphahlele J,
which was refused by the learned judge. Leave was subsequently granted by this
Court to appeal to the Full Court of that Division (the full court). The appeal succeeded
before the full court, which set aside the order of the high court and substituted in its
stead the following:
‘1.1
The scheme, plan, arrangement or system of Lottostar whereby it offers bets, whether
or not of a fixed-odd nature, on the outcome of lotteries is declared unlawful;
1.2
Lottostar is interdicted from offering bets, whether or not of a fixed-odd nature, on the
outcome of any lottery; and
1.3
Lottostar, the Board and Betting World are directed to pay the costs of Ithuba.’

[7] In the course of its judgment, the full court considered and dismissed yet a
further point in limine to the effect that the relevant National Minister, the Minister of
Trade and Industry, the relevant Members of the Executive Council of each of the
other Provinces, the Provincial Gambling Authorities of the eight other Provinces and
bookmakers holding licenses under the relevant Provincial Gambling Laws
(collectively referred to as the further parties), should have been joined as parties to
the proceedings before the high court.

[8] Both the NLC and Ithuba contended that a distinction must be drawn between
necessary joinder, on the one hand, and joinder as a matter of convenience, on the
other, and that in this instance we are concerned with the latter, where the failure to
join does not amount to a non-joinder. This is so, the contention proceeded, because
the relief sought was narrowly circumscribed, and consequently any order that issues
will operate only as against Lottostar. However, whilst that may well have been so
when the application commenced, matters have moved on considerably since then.

[9] After the grant of special leave to appeal by this Court, the National Gambling
Board (the NGB), established in terms of the National Gambling Act 7 of 2004, and
Hollywood Sportsbook Mpumalanga (Pty) Ltd (Hollywood), sought leave to intervene
in the appeal, as the fourth respondent and third appellant respectively.  The NGB
asserted ‘. . . a point of no-joinder of, inter alia, the NGB was raised before the court a
quo but [it] did not deal therewith. The [full court] . . . limited itself to the joinder of
Betting World . . .’

[10] Hollywood is part of a group of companies conducting business as licensed
bookmakers across the country. The Hollywood Group, through its subsidiaries, holds
94 retail licences issued by the respective gambling regulators across 7 provinces.
Hollywood asserts that each subsidiary takes fixed-odd bets on the outcome of
lotteries in terms of their licences with the support of the provincial boards.

[11] In support of the application for leave to intervene in the appeal, Hollywood
states that:
‘21.
The Full Court relied predominantly on sections 57(1) and 57(2)(g) of the Lotteries Act
(paragraph 45 of the judgment) and on the definition of “gambling” in the Mpumalanga
Gambling Act (paragraph 49 of the judgment) to find that the legislation does not permit the
taking of bets on the outcome of lotteries.
. . .
23.
The NGB’s position is that the Constitutional scheme and national legislation precludes
the taking of bets on the outcome of lotteries. It thus views the taking of such bets as an
offence and it regards provincial gambling boards which permit such activities in terms of their
legislation and licences issued thereunder as committing “a secondary offence” (paragraph
18 of the founding affidavit).

24.
The NGB thus adopts a position based on the Constitution which is contrary to that
adopted by the boards it regulates, including the Mpumalanga Board (which seeks to overturn
the judgment of the Full Court) and 8 other gambling boards across the country which permit
fixed odds betting on the outcome of lotteries in terms of provincial gambling legislation.
25.
In support of its contentions as regulator, the NGB wishes to raise points of law
regarding the constitutional legislative competence of the Mpumalanga Board, the
constitutional validity of the Mpumalanga Gambling Act, and the potential override of the
Mpumalanga Act by the National Act by operation of sections 146 and 149 of the Constitution.
26.
These issues were not part of either of the appellants’ applications for special leave or
Hollywood’s intervention application and their implications are far-reaching.
27.
The NGB recognises this. It points out that even if it were to be accepted that the Full
Court judgment only affects the rights of the present appellants (a proposition which the NGB
understandably appears to believe is doubtful), the decision of this Court on “the interpretation
of the interactive pieces of legislation will bind and affect the rest of the provinces and the
country at large” (paragraph 15.3.3. of the founding affidavit).
28.
The breadth and significance of that effect is amplified considerably once the
implications of the Constitutional arguments raised by the NGB are considered.
. . .
30.
The NGB’s primary argument is that, properly interpreted, the Mpumalanga Act does
not permit the taking of bets on the outcome of lotteries. The NGB however seeks to go further
and deal with the important constitutional consequences which arise if the Mpumalanga Act
does permit the taking of bets on lotteries as the appellants contend.
. . .
34.
The fundamental implication of the constitutional arguments on which the NGB seeks
to engage this Court, is that all provincial gambling legislation that permits betting on lotteries
is either unconstitutional or inoperative to the extent it does so. In the result, licences permitting
such betting issued by all those provincial gambling boards are unlawful.
. . .

39.
If this Court were to find that the Mpumalanga Gambling Act is unconstitutional, then it
has an obligation under section 172(1)(a) of the Constitution to declare the act invalid to the
extent of the inconsistency and frame remedial relief in terms of sections 172(1)(b).
40.
A declaration of unconstitutional invalidity operates against the legislation and is
therefore not confined to those already party to the appeal.
41.
The effect of a declaration of invalidity would therefore not be limited to the offerings
of the first appellant. By operation of law, a declaration would directly impact all offerings by
Hollywood under the 9 licences granted in terms of the Mpumalanga Gambling Act, all
offerings by Hollywood under licences granted in terms of other provincial gambling legislation,
and its extensive business operations, financial obligations and many employees that rely on
the revenue of these offerings.
. . .
46.
The implications of the constitutional arguments raised, and any decision by this Court
on those contentions, go far beyond the Full Court’s approach and order.
47.
They bear not only on constitutional validity and operation of the Mpumalanga
Gambling Act and 9 licences issued in terms thereof, but on the validity of all provincial
gambling legislation and all the licences issued to the Hollywood Group by other provincial
Boards.’

[12] Where parties before a court reference matters that require consideration going
beyond the original conception of the case, this may engage the interests of third
parties not before the court. A court will in general order the joinder of parties, inter
alia, to ensure that all parties interested in the subject-matter of the dispute and whose
rights may be affected by its judgment are before it, so as to avoid a multiplicity of
proceedings and to avoid a waste of costs. Substantial costs have already been
incurred in the prosecution of the present proceedings and a great deal of court time
has been invested in them. Those could probably be rendered worthless.

[13] As Fagan AJA pointed out in Amalgamated Engineering Union v Minister of
Labour 1949 (3) SA 637 (A) at 656:
‘The question of joinder should surely not depend on the nature of the subject-matter of the
suit . . . , but . . . on the manner in which, and the extent to which, the Court’s order may affect
the interests of third parties’.
Indeed, as observed by the full court (per Cilliers AJ (Goldstein and Joffe JJ
concurring) in Rosebank Mall (Pty) Ltd v Cradock Heights (Pty) Ltd 2004 (2) SA 353
(WLD) para 37:
‘There is a distinction between the case of a party whose rights are derived purely from ‘the
right which is the subject-matter of the litigation’ and in which he has no legal interest, on the
one hand, and the case where the third party has a right acquired aliunde the right which is
the subject-matter of the litigation and which would be prejudicially affected if the judgment
and order made in which he was not a party were carried into effect . . .’

[14] As counsel readily acknowledged, the primary issues raised are essentially
questions of law that are truly deserving of the attention of this court and from which
not just the present, but also other similarly placed litigants, will likely benefit. They
impact functional areas of concurrent national and provincial legislative competence
(Schedule 4 of the Constitution). And, in interpreting such legislation, regard must be
had to s 150 of the Constitution.1

[15] Although the relief sought in this matter is narrowly framed, all indications are
that this is very much in the nature of a test case, and that similar litigation will follow

1 Section 150 provides: ‘When considering an apparent conflict between national and provincial
legislation, or between national legislation and a provincial constitution, every court must prefer any
reasonable interpretation of the legislation or constitution that avoids a conflict, over any alternative
interpretation that results in a conflict.’

that will implicate comparable provisions of the gambling legislation in force in the
other provinces. In that event, so the submission goes, neither our reasoning on the
questions raised in this matter, nor any order that issues, can simply be ignored in the
adjudication of those matters. In the light of these considerations, it would appear on
the face of it, that the non-joinder objection is a valid one.

[16] Thus, on the acceptance of the correctness of what has been stated by
Hollywood, the interests of further parties should, at the very least, have been
considered to determine whether their joinder was necessary, convenient or neither.
The real difficulty is to know what to do now that the matter has reached an appellate
stage, twice removed from the court of first instance. One seeks to avoid, as far as
may be possible, the necessity of causing the parties unnecessary delay and further
expense. Some six years have passed since the commencement of the matter. There
seems to be little value in seeking to turn back the clock. Accordingly, to expedite
finalisation of the matter, as also to avoid causing the parties unnecessary expense
and delay, the expedient adopted in Eden Village (Meadowbrook) (Pty) Ltd v Edwards
1995 (4) SA 31 (A) at 47, modified perhaps to meet the exigencies of the present
matter, commends itself.

[17] In the circumstances, the attorneys for the NLR and NGB are directed to: (i)
notify each of the further parties of these proceedings and of the order granted by the
full court and cause a copy of this  judgment to be served on them; and (ii) indicate in
that notice that a copy of all of the papers in the application will lie for inspection at
their offices for a period of two weeks from the date of such notification (or will be
available for electronic transmission); and (iii) thereafter, make a return, on affidavit,

to the Registrar of this court setting out what steps have been taken in compliance
with the directions contained in (i) and (ii) above. In turn, each of the Provincial
Gambling Authorities are required to bring these proceedings to the attention of any
Bookmaker that offers bets, whether or not of a fixed-odd nature, on the outcome of
any lottery, pursuant to a licence issued by such Authority under any comparable
Provincial Legislation to the Mpumalanga Gambling Act. Each such further party is
called upon, within two weeks of such notification, to indicate to the Registrar of this
court whether or not they consent to be bound by the judgment of this court,
notwithstanding the fact that they have not been cited as parties to the proceedings.
In respect of those further parties, who express an unwillingness to be bound or who
indicate that they wish to participate in the appeal, further directions will issue as to
the future course of the proceedings. Pending the above, the adjudication of the
appeal is stayed, with the costs standing over for later determination.

______________________
V M PONNAN
JUDGE OF APPEAL

Appearances

For the first appellant:
MM Oosthuizen SC and GJ Bensch
Instructed by:
Luneburg & Janse van Vuuren Inc., Mbombela

Honey Attorneys, Bloemfontein.
For the second appellant:
M Mphaga SC and BJ Nodada
Instructed by:
The State Attorney, Pretoria

The State Attorney, Bloemfontein.
Party seeking leave to intervene
as the third appellant:
AM Annandale SC and J Mivanda
Instructed by:

Grant & Swanepoel Attorneys Inc.,

Pietermaritzburg

Kramer Weihmann Attorneys, Bloemfontein.

For the first respondent:
A Cockrell SC and N Stein
Instructed by:
Maluleke Msimang Attorneys, Pretoria

Bezuidenhouts Inc., Bloemfontein.
For the second respondent:
V Soni SC
Instructed by:
Maphosa Attorneys Inc., Johannesburg

MC Radebe Attorneys, Bloemfontein
Party seeking leave to intervene
as the fourth respondent:
T Skosana SC and K Maleka
Instructed by:
Mketsu & Associates Inc., Pretoria

The State Attorney, Bloemfontein.