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London Clubs International (Overseas) Investment (Pty) Ltd v Free State Gambling and Racing Board

Supreme Court of Appeal -SCA525/03 Hearing date: 3 March 2005
  Judgment date: 31 March 2005
Free State Gambling and Racing Act 6 of 1996 – interpretation of s 93(4) – whether responsible Member of the Executive Council entitled to exercise powers and perform functions of Free State Gambling and Racing Board after expiry of terms of office of Board’s initial members and before appointment of new members – if not, whether Appellant entitled to declaratory relief sought in the court below

Media Summary of Judgment

This media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal

The Supreme Court of Appeal today held that a decision by the Free State MEC for Finance, Expenditure and Economic Affairs to extend the closing date for the submission of applications for the award of casino licences was invalid.

The Free State Gambling Board came into existence under the Free State Gambling Act in 1996, but it had no capacity to function until its first members were appointed in 1998. The Board invited applications for casino licences for various zones in December 2000. The date originally stipulated as the deadline for applications was extended by the Board. The terms of office of all the first appointed members of the Board then expired. Subsequently the MEC purported to approve a further extension of the deadline for applications.

London Clubs International (Overseas) Investments (Pty) Ltd, the appellant in the SCA, had obtained an application form from the Board against payment of the prescribed fee, but did not meet either the deadline set by the Board or the deadline as extended by the MEC. Golden Flamingo Resort (Pty) Ltd, Inciticorp (Pty) Ltd and Vaal River Casino (Pty) Ltd, the third to fifth respondents, also did not meet the Board’s deadline, but they did submit applications before the MEC’s deadline.

In the Free State High Court, London Clubs failed to get an order declaring that the MEC’s extension was invalid. When they took the case on appeal, the SCA held that, under the Act, the MEC had the same powers as the Board only until the first Board was constituted by appointments being made to its membership. After that, he had no authority to extend the deadline. His decision to do was invalid and therefore had no legal consequence.

That was not the end of the case, however. The SCA said that the MEC’s decision was still relevant as the Board might adopt the decision as its own and act upon it. In that case, the Board’s decision might be capable of being set aside. Although the Board had not yet adopted the MEC’s decision as its own at the time of the application in the High Court, it was apparent from the Board’s opposition to the proceedings that there was a real prospect that it would do so when its membership was reconstituted. The proceedings brought by London Clubs therefore did not serve merely an abstract purpose but were necessary to avoid the Board’s future actions being liable to be set aside. The appeal was upheld and the SCA made an order declaring that the MEC’s decision to extend the deadline was not a valid decision of the Board and thus had no legal consequence.



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