Shoprite Checkers (Pty) Ltd v Member of the Executive Council for Economic Development, Tourism and Environmental Affairs: KwaZulu-Natal

Shoprite Checkers (Pty) Ltd operates a national supermarket chain and holds 110 liquor licences in KwaZulu-Natal, most granted under the national Liquor Act 27 of 1989. Twelve of these licences relate to premises situated within approximately 80 metres of religious and learning institutions. The national Liquor Act was repealed on 28 February 2014 and replaced by the KwaZulu-Natal Liquor Licensing Act 6 of 2010 (KZN Act). Shoprite applied to the KwaZulu-Natal Liquor Authority for conversion of its pre-existing licences under section 101 of the KZN Act. The Liquor Authority declined to issue licence certificates for the 12 affected premises, taking the view that section 48(5)(e) of the KZN Act - which prohibits granting licences for premises within a 500-metre circumference of religious or learning institutions - applied to pre-existing licences and made them inconsistent with the new Act. The Authority required Shoprite to apply for temporary amnesty under regulation 47(1) for removal of these licences to compliant premises. Shoprite challenged this interpretation and sought declaratory relief that the KZN Act does not prohibit sale of liquor at pre-existing licenced premises within the prohibited distance, and sought review and setting aside of regulation 47(1).

• Whether section 48(5)(e) of the KwaZulu-Natal Liquor Licensing Act 6 of 2010 applies to pre-existing liquor licences granted under the national Liquor Act 27 of 1989 and in force immediately before commencement of the KZN Act
• Whether the location of premises constitutes a 'term or condition' of a liquor licence for purposes of section 101(1)(a)(ii) and (iii) of the KZN Act
• Whether regulation 47 of the KwaZulu-Natal Liquor Licensing Regulations, 2014 is ultra vires and irrational
• The proper interpretation of transitional provisions in section 101 of the KZN Act dealing with conversion of pre-existing licences
• Whether condonation should be granted for late filing of review application beyond the 180-day period prescribed in PAJA

The appeal was upheld with costs, including costs of two counsel. The High Court order was set aside and replaced with declarations that: (1) The KZN Act does not prohibit sale of liquor at pre-existing licenced premises within 500 metres of religious/learning institutions where the licence was validly granted under the 1989 Act and is converted under section 101(1)(a) of the KZN Act; (2) Regulation 47 was reviewed and set aside; (3) Condonation for late filing of the review application was granted; (4) Costs awarded to Shoprite against the respondents jointly and severally, including costs of two counsel.

Section 48(5)(e) of the KwaZulu-Natal Liquor Licensing Act 6 of 2010, which prohibits granting licences for premises within a 500-metre circumference of religious or learning institutions, does not apply to pre-existing liquor licences granted under the national Liquor Act 27 of 1989 and being converted under section 101 of the KZN Act. The location of licenced premises does not constitute a 'term or condition' of a liquor licence within the meaning of section 101(1)(a)(ii) and (iii) - the Act distinguishes between premises (specified in applications) and terms and conditions (imposed when granting licences). Section 101(2)(a) expressly excludes the application procedure in Chapter 6 (which contains section 48(5)(e)) for conversion of pre-existing licences. Holders of valid pre-existing licences are entitled to licence certificates under section 101 upon proof of their licences and payment of prescribed fees, without the new proximity prohibitions applying. Regulations that purport to render unlawful what the enabling statute does not prohibit are ultra vires and violate the principle of legality. Regulation 47, which required pre-existing licence holders within the prohibited distance to apply for temporary amnesty, served no rational purpose and was invalid.

The court made several non-binding observations: (1) Policy considerations underpinning the prohibition on licences near schools and religious institutions (reducing alcohol-related harm to learners, protecting religious practices) are undoubtedly laudable, but courts must interpret legislation according to the words used rather than assumed policy intentions; (2) The court emphasized it was not questioning government's powers to formulate policy or pass legislation, only interpreting the words actually used in the Act; (3) If the outcome is regarded as undesirable, the remedy lies with the legislature to amend the Act using clear language; (4) Courts are enjoined to be cognizant of the exclusive spheres of the executive and legislative arms of government; (5) A liquor licence has commercial value apart from the premises to which it relates; (6) The court noted the MEC's evidence that there were 673 liquor outlets next to places of worship and 930 next to schools in KwaZulu-Natal, but this did not affect the legal interpretation required. The court also observed that the respondents did not oppose the condonation application, presumably due to lack of prejudice from the delay.

This judgment is significant for its approach to statutory interpretation of transitional provisions when new legislation replaces an old regulatory regime. It confirms important principles: (1) Courts will not lightly interpret legislation as destroying vested rights unless clear language requires that conclusion; (2) The location of premises does not constitute a 'term or condition' of a liquor licence - these are distinct concepts in liquor licensing law; (3) Where conversion provisions expressly exclude new application procedures, those procedures (including new prohibitions) do not apply to converted licences; (4) Regulations that purport to render unlawful what the enabling statute does not prohibit are ultra vires and violate the principle of legality; (5) The rationality requirement applies to delegated legislation - regulations must serve a rational purpose related to the enabling power; (6) Section 12(2)(c) of the Interpretation Act preserves obligations incurred under repealed legislation unless contrary intention appears. The case provides important guidance on balancing legitimate policy objectives (reducing alcohol-related social harm near schools and religious institutions) with protection of existing property rights and commercial interests. It reinforces that policy changes affecting vested rights require clear legislative language, and that courts will interpret transitional provisions to minimize disruption to lawfully acquired rights.