Liquor Licensing and the Limits of Law: Revisiting the Principle of ‘Creature of Statute’ in South African Administrative Practice
- Ruan Vd Merwe
- Jul 11
- 10 min read
By Marius Blom Inc. | Liquor Licensing Attorneys – Gauteng and National
📞 012 004 0244 | ✉️info@mariusblom.co.za
In South African administrative law, the principle that public decision-makers are creatures of statute is a foundational concept.
A body created by statute has no inherent power; it may exercise only those functions and powers expressly conferred by its enabling legislation. Any action that exceeds those powers is ultra vires, unlawful, and subject to review.
This principle is especially important in the context of liquor regulation. Provincial liquor boards and national authorities play a pivotal role in issuing licences and regulating the liquor trade. However, increasingly, these bodies are acting beyond the limits of their legislative authority—introducing unprescribed requirements, imposing policy-based conditions, and relying on systems not provided for in legislation, being of their own creation. The result is a liquor licensing environment that is opaque, inconsistent, and constitutionally deficient.
1. The Meaning and Significance of Being a “Creature of Statute”
A creature of statute refers to any authority or administrative body whose powers originate solely from legislation. Such a body may not assume powers by implication, policy, or convenience—it must act within the strict framework of the law. This principle protects legal certainty, democratic accountability, and the constitutional right to fair administrative action under Section 33 of the Constitution.
For example, the magistrates’ courts operate strictly within the bounds of the Magistrates' Courts Act 32 of 1944. Likewise, the Gauteng Liquor Board (GLB), the National Liquor Authority (NLA), and other provincial boards derive their powers from their respective statutes, such as the Gauteng Liquor Act 2 of 2003 or the Liquor Act 59 of 2003. These boards may not make law, invent conditions, or develop processes that are not legislated.
2. Judicial Enforcement of the Statutory Boundaries
South African courts have repeatedly affirmed the limits of administrative power in the context of liquor licensing. Several recent cases provide compelling examples.
Agrella Six General Dealer CC v Gauteng Liquor Board
In Agrella, the GLB approved a liquor licence but refused to issue it until the applicant submitted:
• A work permit endorsed with explicit permission to trade under the licence, and
• A clearance certificate from Johannesburg Emergency Services.
These conditions had no statutory basis. The applicant had complied with all legislated requirements at the time of application. Judge Hughes ruled that the GLB had no authority to delay the issuance of the licence:
“As a creature of statute, the respondent is bound within the confines of the enabling statute… Once it goes outside the scope of the statute, its conduct is ultra vires.”(Agrella Six General Dealer CC v GLB, Case No. 80134/2015)
Thomas Yoden Franken and Others v Gauteng Liquor Board (The “Franken” Decision)
In Franken, the GLB required all applicants, regardless of licence type, to submit municipal Local Authority Approvals (LAAs) and proof of lawful occupation (PLOs). This blanket requirement contradicted section 23(4) of the Gauteng Liquor Act, which only prescribes such documents for a limited set of licence categories (e.g., taverns, liquor stores).
Judge Prinsloo rejected the GLB’s interpretation:
“The Board cannot impose a requirement where the legislature has not.”(Thomas Yoden Franken and Others v Gauteng Liquor Board, Case No. 68466/2017)
The GLB’s continued disregard for this judgment, despite its binding effect, raises serious concerns about the rule of law and administrative accountability.
Pick n Pay Retailers (Pty) Ltd v Gauteng Liquor Board (The “Blue Hills” Decision)
In this case, the GLB approved Pick n Pay’s liquor licence application for its Blue Hills store. However, the Board refused to issue the licence until the applicant submitted:
• A certificate from Johannesburg Emergency Management Services,
• A report from the Johannesburg Environmental Health Department.
These documents are not required by the Gauteng Liquor Act or its regulations. Olivier AJ (also a professor in administrative law at UJ at that point in time), found the GLB’s conduct unlawful and ultra vires, stating:
“Once a licence is granted, the Board is legally obliged to issue it. The introduction of extra-statutory conditions—particularly after approval—is not only unlawful but undermines the certainty that licensing legislation exists to protect.”(Pick n Pay v GLB, Case No. 56038/2015)
Pick n Pay Retailers (Pty) Ltd and Modderfontein Brewery (Pty) Ltd v Gauteng Provincial Liquor Board (Case No. 48915/2012)
In this matter, the applicants sought urgent relief after the Gauteng Liquor Board refused to accept the lodgement of a new licence application and the nomination of responsible persons, citing the absence of a tax clearance and police clearance certificates. Justice Tlhapi ruled that the Board, as a creature of statute, could not impose requirements not prescribed in the Gauteng Liquor Act or its regulations. The court emphasised that administrative staff do not have the power to screen or reject applications before they are properly placed before the Board or its committees for consideration:
“The rejection of the applications by the administrative staff was a deprivation of an opportunity for the Board to properly consider their matters... Powers, functions and duties of the Board cannot be performed by its administrative staff... The directive given by the chairperson... was unlawful and not in compliance with the Act.”
(Pick n Pay Retailers (Pty) Ltd and Modderfontein Brewery (Pty) Ltd v Gauteng Provincial Liquor Board, Case No. 48915/2012)
This judgment reinforced the principle that liquor licensing authorities cannot create procedural hurdles or delegate statutory functions to administrative staff without legislative authorisation.
3. A Deeper Problem: Administrative Misinterpretation of Section 41(5) of the Gauteng Liquor Act
A growing source of contention in Gauteng is the GLB’s reliance on section 41(5) of the Gauteng Liquor Act to justify requests for a wide array of municipal compliance documents, even where the application has otherwise met statutory requirements. The GLB has interpreted this provision as requiring:
• Local Authority Approval (LAAs),
• PLOs (Proof of Lawful Occupation),
• Fire safety certificates,
• Plan approvals,
• Environmental health clearances,
• And even security or gas compliance records.
However, this interpretation has already been addressed and rejected by the High Court in the Franken matter and reiterated in several follow-up representations. Section 41(5) pertains to post-licensing compliance by the licensee and does not form part of the requirements for lodging or approving an application.
The GLB’s attempt to impose municipal compliance obligations as a licensing prerequisite amounts to an unconstitutional intrusion into the competencies of local government. Section 41 of the Constitution enshrines cooperative governance, but it does not permit one organ of state to assume the powers of another. The GLB is not empowered to enforce fire safety regulations, building control, or environmental health standards. That is the sole domain of municipalities.
Moreover, administrative decision-makers cannot "agree to disagree" with binding High Court judgments. The stare decisis doctrine compels compliance, regardless of internal views. The GLB’s continued deviation, under the guise of cooperative governance, has been labelled contemptuous, unlawful, and a contributing cause to its persistent backlog.
4. Broader Patterns of Administrative Overreach
In addition to these specific cases, there is a broader, systemic pattern of unlawful administrative behaviour, including:
• Police Clearance Certificates: Imposed as standard practice despite no enabling provision.
• Certificates of Compliance from the Department of Agriculture: Often demanded of micro-manufacturers, despite no reference in the provincial legislation, North West Province.
• Municipal Accounts: Used as a discretionary filter in digital application processes.
• Unlegislated Digital Systems: Online application platforms now dictate:
◦ Non-statutory document checklists;
◦ Restricted access to submitted applications;
◦ Non-transparent application statuses that frustrate applicants;
◦ Blocking of progress for non-compliance with requirements not found in the Act.
These developments reflect a shift toward policy-based bureaucracy, rather than legally grounded regulation.
5. The Revival of Lapsed Liquor Licences: An Administrative Overreach Without Statutory Mandate
Another unlawful practice increasingly observed in Gauteng is the so-called revival or reinstatement of liquor licences that have lapsed due to non-payment of annual fees. These administrative revivals are often coupled with invented penalties or internal procedures not grounded in the Gauteng Liquor Act 2 of 2003 or its regulations. This practice represents a further breach of the principle that licensing authorities are creatures of statute and may only act within the confines of their enabling legislation.
According to section 36 of the Gauteng Liquor Act, a liquor licence lapses automatically if the prescribed annual renewal fees are not paid within the timeframe specified in the regulations. There is no provision in the Act that empowers the Gauteng Liquor Board to reinstate such a lapsed licence or to impose penalties in lieu of timely compliance. Moreover, the Act does not provide any discretion or grace period beyond what is expressly legislated.
Despite this, the Liquor Board has, in some instances, offered applicants the opportunity to “revive” their licences after lapse—either through the payment of a “fine,” the submission of new forms, or through internal guidelines not published in the Government Gazette. These practices have no statutory foundation and are thus ultra vires, irrational, and unlawful.
This issue was directly addressed in the case of Du Plessis NO v Voorsitter van die Drankraad en Andere (Case No. 1561/94), decided in the Orange Free State Provincial Division of the High Court. The applicant, a liquidator, brought an urgent application seeking the reinstatement of a retail liquor licence that had lapsed under the Liquor Act 27 of 1989 for failure to pay annual fees before 31 December. The court rejected the application and firmly ruled that revival was not permitted beyond the final statutory deadline of 28 February.
Justice Malherbe held:
“Die finale afsnypunt vir die hernuwing van lisensies is derhalwe 28 Februarie. Deur te ‘versuim’ om vir ‘n verlenging van die grasietydperk na 28 Februarie voorsiening te maak, het die Wetgewer ook sy bedoeling duidelik gemaak, nl. dat dit nie kragtens die Drankwet gedoen kan word nie.”
The court confirmed that there is no inherent jurisdiction in the High Court, nor residual discretion in the Liquor Board, to reinstate a licence that has lapsed beyond the statutory window:
“Die Hof beskik nie oor die inherente regsbevoegdheid… om die aangevraagde regshulp toe te staan nie.”
The court also emphasised that previous similar orders, which had been granted unopposed in other divisions, carried no persuasive weight:
“In die lig van die voorgaande het die vorige aansoeke in hierdie Afdeling, met eerbied, weinig oortuigingskrag.”
Finally, and most conclusively, the court stated:
“Die lisensie het verval en [kan] nie deur die Drankraad of sy voorsitter herstel kan word nie.”
This judgment illustrates that the statutory framework for the regulation of liquor licences is strict and final. There is no implied power to condone non-compliance, no discretionary extension period, and no authority to invent revival processes. The court rejected the argument that public interest or hardship could justify departure from the statute.
Any attempt by the Gauteng Liquor Board to “revive” lapsed licences or impose extra-statutory fines constitutes administrative overreach and is open to review under section 6(2)(a)(i), 6(2)(f)(i), and 6(2)(f)(ii) of the Promotion of Administrative Justice Act 3 of 2000.
As creatures of statute, the Liquor Board and its officials must adhere strictly to the powers conferred by the Act. A lapsed licence is a legal nullity. It cannot be resurrected by policy, by payment, or by administrative invention. Only the legislature—not the Board—may provide for late renewal or revival, and until it does so, such powers do not exist.
6. The Tsogo Sun Judgment: Supreme Court Affirms Limits of Administrative Power
In Tsogo Sun Caledon (Pty) Ltd and Others v Western Cape Gambling and Racing Board and Another [2022] ZASCA 102, the Supreme Court of Appeal ruled that a licensing authority may not act on policy or convenience in place of legislation. The Western Cape Gambling Board had imposed B-BBEE conditions across licensees without statutory authority or case-specific justification.
The SCA found the Board had:
• Misconstrued its enabling Act;
• Substituted policy for statutory inquiry;• Violated the principle of legality.
“Even the best of intentions cannot legitimise conduct that is unlawful… An administrative body may not act as a parallel legislature.”(Tsogo Sun, para 61)
The principles set out in Tsogo Sun apply directly to liquor boards: they may not introduce requirements, platforms, or processes that are not authorised by the enabling legislation.
7. The Influence of Policy on Statutory Decision-Making
An increasingly common concern in the administration of liquor licensing is the inappropriate reliance on policy frameworks—specifically the National Liquor Norms and Standards (2015)—by provincial liquor boards when making decisions that should be based solely on legislation.
While these Norms and Standards were published by the Minister of Trade and Industry as part of a national policy framework, they do not carry the force of law and cannot override or supplement provincial liquor legislation.
The National Liquor Policy Council, established under the Liquor Act 59 of 2003, was created as a consultative body with no legislative powers. Its function is to promote intergovernmental cooperation and encourage the development of aligned standards across provinces. However, any recommendations or policy guidelines it produces remain advisory, and may only become binding once formally enacted into law by the relevant provincial legislature.
Despite this, there is mounting evidence that provincial liquor boards derive or justify decisions, including prejudicial refusals, by reference to these national policy documents, or use them to justify administrative requirements or procedural hurdles. This practice blurs the line between law and policy.
Licensing authorities often embed policy preferences within their internal workflows, forms, or decision templates, presenting them as if they form part of the applicable law. In doing so, they substitute policy expectations for legislative mandates and depart from the constitutional requirement that all administrative action must be lawful, reasonable, and procedurally fair (section 33 of the Constitution).
Courts have repeatedly cautioned that administrative functionaries are creatures of statute. They may only act within the confines of the powers explicitly granted to them by law. Policy can inform the development of legislation but cannot replace it. Until such time as the norms and standards are formally incorporated into provincial legislation, they have no binding legal status.
Decisions based on such policy considerations are therefore reviewable under section 6(2)(e)(i) and 6(2)(f)(ii) of the Promotion of Administrative Justice Act 3 of 2000.
This overreliance on policy instruments not only undermines the rule of law but also exacerbates inconsistency and inefficiency within the licensing system.
8. Conclusion: A Call to Lawfulness and Accountability
The Constitution demands that every administrative action be lawful, reasonable, and procedurally fair. Liquor boards are not lawmakers; they are implementers. As creatures of statute, they may not legislate from the desk, invent new requirements, or encroach on the powers of municipalities or other departments.
When authorities like the GLB reject court judgments, reinterpret legislation to suit internal policy, or impose extra-legal burdens on applicants, they act unlawfully. They also violate the stare decisis principle that lower courts and government officials are bound by the decisions of higher courts.
To restore legal certainty and functional governance in liquor licensing, urgent steps are required:
• Eliminate all non-statutory conditions.
• Respect High Court and SCA decisions.
• Reconsider legislation.
• Online systems must be strictly limited to processes permitted by applicable liquor legislation, as such systems cannot override or deviate from statutory requirements.
• Clarify mandates and end interdepartmental overreach.
The Constitution and enabling legislation are the only valid sources of administrative power.
Anything beyond that is unlawful and must be challenged.
Contact us today:
📍 409B Lea Street, Waterkloof Glen, Pretoria
📞 012 004 0244
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