LIQUOR AND THE RULE OF LAW

It will not be disputed that the basis of our democracy is the Rule of Law. This is generally stated and propagated, but unfortunately not practiced.

An important principle of the Rule of Law is that an administrative organ is a “Creature of Statute”. This means that such an organ has been created by a statute of Parliament and has only the powers vested in it by virtue of its empowering Legislation and must comply with the duties imposed on it by its empowering Legislation.

When it comes to liquor it simply means that all Liquor Boards or Authorities ranging from the National Liquor Authority to each of the Provincial Liquor Boards, Authorities of Tribunals, cannot require of an applicant what is not prescribed in the empowering Legislation and Regulations and must give effect to all the provisions of its empowering Legislation. Unfortunately, this does not happen and that notwithstanding numerous High Court decisions in which we were involved where the Court underlined the importance of the principle of a “Creature of Statute” and the meaning thereof. The most common example of this kind of delinquent behavior on the part of Authorities are briefly the following:

1. The Mpumalanga Liquor Authority, which is the Board of Mpumalanga Economic Regulator and as such defined as the Liquor Authority in terms of Section 2 of the Mpumalanga Liquor Act, 5 of 2006, requires of an applicant to file a Police Report and a Police Clearance in applying for a liquor licence. Nowhere in the empowering Legislation there is such a requirement.

2. The Gauteng Provincial Liquor Board introduced its own recipe for the issuing of licenses, which is totally in conflict with the prescribed procedure contained in the empowering Legislation. In terms of the latter the Liquor Board must issue a licence when it is granted, and issue means to make available to the applicant. The applicant must then pay with the bankers of the Liquor Board the prescribed initiation fee and the bankers of the Liquor Board must then inform them of the payment. The Liquor Board, however, requires of an applicant first to pay and then to collect the licence, which usually leads to weeks of delay. Notwithstanding the fact that the High Court has directed in at least three decisions that this procedure cannot be followed, the Gauteng Liquor Board apparently is not impressed with the opinion of the High Court and still enforces their own recipe.

3. The Kwa-Zulu Natal Liquor Authority requires of an applicant to submit with his application for a new licence, a business licence for the proposed business. This is notwithstanding the fact that the business licence can only be applied for an obtained once a premises is “turnkey”. The Act requires that a licence must be submitted “if applicable”. Reading the Legislation on business licenses, it is clear to our mind that a liquor store does not require a business licence, but notwithstanding this fact and repeated submissions to the KZA Local Authority, they still enforce this requirement. This issue is currently pending before the KwaZulu-Natal High Court in Pietermaritzburg and we will report as the matter progresses.

4. The Western Cape Liquor Tribunal, through its new Chief Executive Officer, has taken upon itself to decide whether applications will be accepted or not, depending on the perception of a staff member or even one of the Tribunal members that the application is compliant or not. Nowhere in Law is there provision for anybody but a designated Board tasked with deciding applications, to decide whether the application is compliant or not, much less whether it will be accepted or not. This issue was previously also an issue with the Gauteng Liquor Board, but it was clarified by the Court and the Court ruled that the Liquor Board is a “Creature of Statute” and cannot require more of an applicant than is prescribed nor can it refuse through its administrative staff, to accept lodgment of a document tendered for lodgment. It is only the appointed decision makers who can decide whether an application is compliant or not. Should you be interested in the decision of the Gauteng Court, we will make available to you a copy of the judgment in the matter of Pick ‘n Pay Retailers (Pty) Limited & Modderfontein Breweries (Pty) Limited vs The Gauteng Provincial Liquor Board.

In addition to the contentious approach of Boards to the “Creature of Statute” principle, the Gauteng Liquor Board has even gone as far as making Legislation themselves, or so they think, by publishing Notices in the Gazette. It is obviously that the Liquor Board and nobody else except Parliament and the MEC to the extent that the MEC is authorised to do so, can make Legislation or amend Legislation.

The following are examples in question:

1. The Chairperson of the Liquor Board published a Notice in the Provincial Gazette changing the content of table wine from 12% per volume to 14% per volume;

2. The Chairperson of the Gauteng Liquor Board has published a Notice in the Provincial Gazette which makes it possible, by paying a penalty, to revive a lapsed licence and that notwithstanding the High Court decisions, which clearly determined that it is not possible after the statutory granted leigh way of sixty days. The Liquor Board actually tried to obtain a declaratory order that they may do this, but their application was dismissed with costs! Nevertheless, they still practice the revival of licenses by payment of a penalty.

ONLINE SYSTEMS:

1. The National Liquor Authority and the Gauteng Provincial Liquor Authority has introduced an online application system whilst there is no single Regulation or provision in the empowering Legislation which provides for an online registration system. In addition these systems require more of an applicant for registration than is prescribed in the empowering Legislation.

2. In our mind these online systems are ultra vires. Sometime or another it will become necessary for the trade to approach the High Court for a declaratory order in this regard.

3. Though the Mpumalanga Liquor Authority does not have an online registration system, they make use of an online administrative system which is also not provided for in the Act. Accordingly, what was said above also applies here.

COMMENTS:

You are welcome to send us your comments on the thoughts expressed above as we would like to enter into a decision on the issued raised as history has taught us that debating issues leads to clarity and tends to fill in the gaps of the point of the view of the posing thoughts.