The Gauteng Gambling Board v Silverstar Development Limited and Others

In April 1997, the Gauteng Gambling Board (the Board) invited applications for up to six casino licences in Gauteng province. It received 23 applications, which it evaluated according to statutory criteria in ss 40 and 41 of the Gauteng Gambling Act 4 of 1995. The Board divided the province into six geographic areas, including the West Rand area where only two applicants applied: Silverstar Development Limited and Rhino Hotel and Resort Limited. After comprehensive evaluation, the Board preferred Rhino's application based on its location in a rural, economically depressed area. The Executive Council (Exco) favored Silverstar but was persuaded to concur with the Board's decision. However, Rhino's application was rejected for environmental reasons in October 1999 when its proposed site received World Heritage status. Rhino and Silverstar then submitted a combined application in 2000, which the Board approved, but this was set aside on review by Roux J as an impermissible substitution. In November 2002, Silverstar requested the Board to grant its original application. The Board refused, maintaining Rhino was its preferred applicant despite Rhino no longer being viable. Silverstar applied to review this refusal.

• Whether a court on review may substitute its decision for that of an administrative tribunal and grant the relief sought by the applicant rather than remitting the matter to the tribunal
• Whether the circumstances of the case constituted an 'exceptional case' justifying substitution of the court's decision under s 8(1)(c)(ii)(aa) of the Promotion of Administrative Justice Act 3 of 2000
• What considerations of fairness apply when determining whether to remit a matter to an administrative body or make the decision itself
• Whether the Board had properly considered Silverstar's application or had merely refused it as a corollary of preferring Rhino

The appeal was dismissed with costs, including costs of two counsel. The order of the court a quo was amended to require the Board and Exco (the First and Third Respondents) to award and issue a casino licence for the West Rand area to Silverstar on the terms set out in its 1997 application but subject to conditions contained in the Board's November 2001 memorandum regarding the combined application.

A court reviewing administrative action may substitute its own decision for that of the administrative functionary in exceptional cases where: (1) the administrative body has already brought to bear all relevant information and expertise in evaluating the matter; (2) no factual or expert basis exists to suggest reconsideration would yield a different outcome; (3) the court is in as good a position as the administrator to decide and fairness demands the court make the decision; (4) remittal would serve no purpose and would be unfair to the applicant; and (5) the outcome is inevitable. The mere fact that a statutory power is vested in an administrative body does not preclude substitution where these exceptional circumstances exist and the constitutional imperative of lawful, reasonable and procedurally fair administrative action requires finality.

The Court observed that in the present state of South African law's development, a legitimate expectation does not found a claim for substantive relief but merely protects procedural fairness, citing Meyer v Iscor Pension Fund 2003 (2) SA 715 (SCA). The Court noted an alternative academic view supporting substantive protection of legitimate expectations (Campbell (2003) 120 SALJ 292). The Court also commented that the Board's persistent opposition to Silverstar based on grounds largely superseded by events and inconsistent with its approval of the combined application suggested the Board had lost its objectivity, though this alone would not justify substitution absent the other exceptional circumstances.

This case is significant in South African administrative law for clarifying when courts may exercise the exceptional power under s 8(1)(c)(ii)(aa) of PAJA to substitute their own decision for that of an administrative body rather than remitting the matter. It establishes that substitution is justified when: (1) the administrative body has already comprehensively considered all relevant factors; (2) no reasonable possibility exists of a different outcome on reconsideration; (3) the court has access to all the information and expertise that informed the original decision; (4) remittal would be futile and unfair; and (5) the outcome is inevitable. The case demonstrates that while courts should normally be slow to assume discretions vested in specialized administrative bodies, considerations of fairness, delay, and the futility of remittal may in exceptional circumstances justify final judicial determination of the matter.