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[2002] ZACC 5
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First National Bank of SA Limited t/a Wesbank v Commissioner for the South African Revenue Services and Another; First National Bank of SA Limited t/a Wesbank v Minister of Finance (CCT19/01) [2002] ZACC 5; 2002 (4) SA 768 (CC); 2002 (7) BCLR 702 (CC); 64 SATC 471 (16 May 2002)

CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT
19/01
FIRST NATIONAL BANK OF SA LIMITED
t/a
WESBANK Appellant
versus
THE COMMISSIONER FOR THE SOUTH
AFRICAN
REVENUE SERVICES First Respondent
THE MINISTER OF FINANCE Second
Respondent
and
FIRST NATIONAL BANK OF SA LIMITED
t/a
WESBANK Appellant
versus
THE MINISTER OF
FINANCE Respondent
Heard on : 28 August 2001
Decided on : 16
May 2002
JUDGMENT
ACKERMANN
J:
Introduction
[1] This is a direct appeal,
with leave of this Court, from the judgment and order of the Cape of Good Hope
High Court
[1]
(the High Court)
dismissing a constitutional challenge by the appellant, First National Bank of
SA Limited (trading as Wesbank)
(FNB), to the
provisions
[2]
of section 114 of the
Customs and Excise Act 91 of 1964 (the Act) in two High Court cases, Nos 825/99
(the Lauray-Airpark case) and
9101/94 (the Republic Shoes case) respectively.
Although this Court has come to a different conclusion, the judgment of the High
Court has been of much assistance in a complex matter.
[2] FNB is a
financial institution that sells and leases movables. Three motor vehicles of
which it is the owner have been detained
under the provisions of section 114 of
the Act. The first respondent is the Commissioner of the South African Revenue
Service (the
Commissioner) who is charged under section 2(1) of the Act with its
administration. The second respondent is the Minister of Finance
(the Minister)
under whose aegis the Act falls.
[3] The two cases were consolidated for
hearing in the High Court. In the Republic Shoes case it was common cause that
FNB’s
cause of action had arisen before 27 April 1994, the date on which
the interim Constitution came into force. The High Court accordingly
correctly
held, on the strength of the judgment of this Court in
Rudolph and Another v
Commissioner for Inland Revenue and
Others
,
[3]
that FNB could not
validly base a challenge on either the interim Constitution or the 1996
Constitution
[4]
and that the
substantive dispute in this case fell away. The only issue on appeal in the
Republic Shoes case is the costs order
made in the High Court. Unless the
contrary is indicated, all references in this judgment will be to the
Lauray-Airpark case.
[4] The Act provides for the “levying of
customs and excise duties and a surcharge; for a fuel levy and for an air
passenger
tax; the prohibition and control of the importation, export,
manufacture or use of certain goods; and for matters incidental
thereto”.
[5]
It is primarily a
fiscal measure and has counterparts in countries throughout the world. Section
114 is concerned with the collection
of debts (customs debts) due to the state
by the debtor (customs debtor) under the Act. For the purposes of this case,
and at the
risk of oversimplification it is helpful to emphasize two features of
the provisions of section 114 at this stage. The first is
that, in order to
collect the debt owed, they allow the Commissioner to sell goods without the
need for a prior judgment or other
authorisation by a court. The second is
that, in order to satisfy the debt owed, the Commissioner may sell goods even
where the
goods do not belong to the customs debtor but to some third
party.
[5] FNB contends, as it did in the High Court, that section 114
of the Act constitutes an unjustified infringement of its constitutional
rights
to have access to the courts in the settlement of
disputes,
[6]
to the protection of its
property
[7]
and to its freedom to
choose a trade.
[8]
Save for the
constitutional attack, the entitlement of the Commissioner in terms of section
114 of the Act to act as he has done
in this case is not in
dispute.
[6] The format of this judgment is as follows:
The
factual background
: paras 7 to 10.
Section 114 of the Act
: paras
11 to 18.
Goods subject to detention and sale under section 114
: paras
19 to 23.
The property challenge.
Introduction
: paras 24 to
40.
The property challenge issues
: paras 41 to 46.
The meaning
of Section 25:
Introduction
: paras 47 to 50.
The meaning of “property” in section 25
as applied to the
present case
: paras 51 to 56.
The approach
to deprivation in the context of section 25
: paras 57 to 60.
The
meaning of “arbitrary” in section 25:
Introduction
:
paras 61 to 70.
Comparative law on deprivation of property
: paras
71 to 99.
The conclusion reached on the meaning of arbitrary in section 25:
para
100.
“Arbitrary” deprivation as applied to section 114 of the
Act
: paras 101 to 109.
Justification
:
paras 110 to 113.
The appropriate relief
: paras 114 to 115.
The
section 34 access to court challenge
: paras 116 to 118.
The other
challenge
: para 119.
Disposal of the appeals
: paras 120 to
131.
The order
: paras 132 to 133.
The factual
background
[7] FNB, acting in the normal course of its business, leased
a Volkswagen Jetta to Lauray Manufacturers CC (“Lauray”)
in November
1994 and a Volkswagen Golf to Airpark Cold Halaal Storage CC
(“Airpark”) in November 1995. In January 1996
FNB sold a
Mercedes-Benz to Airpark under an instalment sale agreement with reservation of
ownership until the last instalment was
paid. Appellant thus remained the owner
of all three vehicles.
[8] On 16 February 1996 the Commissioner
detained, and thereby established a lien, over several vehicles on
Lauray’s premises
in terms of section 114 of the Act. One of these
vehicles was the Volkswagen Jetta. This was done in order to obtain security
for
approximately R3,26m
[9]
comprising
predominantly of outstanding customs duty, penalties and payment in lieu of
forfeiture arising out of an alleged fabric
smuggling network. Lauray was placed
in provisional liquidation on 17 November 1997. On 18 December 1997 the
liquidator cancelled
the lease. The Commissioner lodged a claim with the
liquidator and received an amount of R198 074,96. Appellant did not lodge a
claim for the arrears in lease payments since it would have been treated as a
concurrent creditor in circumstances where there was
no prospect of a dividend
for concurrent creditors. The Commissioner has indicated, subject to the
outcome of these legal proceedings,
that he intends selling the vehicle in order
to satisfy the outstanding customs debts of Lauray. Lauray was originally
allowed to
use the Jetta after detention, but it has been stored in a state
warehouse since 27 March 1998.
[9] On 7 April 1997 the Commissioner
detained and established a lien over the Volkswagen Golf and the Mercedes-Benz
leased and sold
respectively by FNB to Airpark. This was done in order to
obtain security for customs debts and penalties of R640 571,32 owed by
Airpark.
Airpark had removed goods from a customs and excise cold storage warehouse
without paying customs duty. The Commissioner
has not sought to liquidate
Airpark since there would be no benefit to creditors. The Commissioner has
however stated his intention
to sell the vehicles in an endeavour to recover at
least part of Airpark’s outstanding debt of R397 920,80. The two vehicles
have been stored in the state warehouse since 26 March 1998.
[10] It
should further be noted that FNB claims substantial sums to be outstanding with
regard to the three vehicles, both in terms
of payments which have fallen in
arrears and in terms of total outstanding contract payments.
Section
114 of the Act
[11] The Constitutional attack in this case is focussed
primarily on the power of the Commissioner to detain and sell various types
of
property under the provisions of section 114 of the Act, which in its relevant
part reads as follows:
“(1)(a)(i) The correct amount of duty for which any person is liable in
respect of any goods imported into or exported from
the Republic or any goods
manufactured in the Republic shall from the date on which liability for such
duty commences; and
(ii) any interest payable under this Act and any fine, penalty or forfeiture
incurred under this Act shall, from the time when it
should have been paid,
constitute a debt to the State by the person concerned, and any goods in a
customs and excise warehouse or in the custody of the
Commissioner
1
[0]
(including goods in
a rebate store-room) and belonging to that person, and any goods afterwards
imported or exported by the person
by whom the debt is due, and any imported
goods in the possession or under the control of such person or on any premises
in the possession
or under the control of such person, and any goods in respect
of which an excise duty or fuel levy is prescribed (whether or not
such duty or
levy has been paid) and any materials for the manufacture of such goods in the
possession or under the control of such
person or on any premises in the
possession or under the control of such person and any vehicles, machinery,
plant or equipment in
the possession or under the control of such person in
which fuel in respect of which any duty or levy is prescribed (whether or not
such duty or levy has been paid), is used, transported or stored, may be
detained in accordance with the provisions of subsection
(2) and shall be
subject to a lien until such debt is paid.
. . . .
(b) The claims of the State shall have priority over the claims of all persons
upon anything subject to a lien contemplated in paragraph
(a) or (aA) and may be
enforced by sale or other proceedings if the debt is not paid within three
months after the date on which
it became due.
. . .
.”
[12] It is useful to paraphrase the mechanism for which section
114 provides in order to relate it to the wider scheme of the Act.
The Act is
singularly detailed and even a cursory overview of its provisions would burden
this judgment unnecessarily. The limited
explanation that follows under this
heading is intended solely to provide a setting for the constitutional enquiry
and will focus
on customs duty. Issues of contention regarding the
interpretation of section 114 will be dealt with later in the
judgment.
[13] Two types of debt to the state are constituted by the
provisions of section 114(1)(a) and may be secured and enforced by a lien
and
sale of goods. First, the “correct amount of duty” for which a
person is liable from the date of such liability
in respect of imports, exports
or manufacture in the Republic.
1
[1]
Secondly, any interest payable and fine, penalty and forfeiture incurred from
the date on which liability for such duty
commences.
1
[2]
The correct
amount of duty
[14] The main duties in question consist of customs duty
on imported goods, excise duty on goods manufactured locally, and fuel levy
on
imported or locally produced goods. Liability for imported goods commences from
the time when goods are deemed to be imported
into the
Republic.
1
[3]
Duty is payable at
the time of entry for home consumption of such
goods.
1
[4]
An importer of goods has
to complete the requisite forms, produce a bill of entry as prescribed, and pay
the customs duty within
the time prescribed for making due
entry.
1
[5]
The customs duty payable
is determined by application of, amongst others, sections 45, 47(1) and 58(1) of
the Act as circumstances
may require, as well as the provisions of Schedules 1
and 2. The value for duty purposes is determined by the provisions of Chapter
IX of the Act.
1
[6]
A wide range of
persons is liable for the payment of duties under the
Act.
1
[7]
With reference to customs
duty this would include the master or pilot of the ship or aircraft
concerned;
1
[8]
the container or the
depot operator;
1
[9]
and
importers,
2
[0]
the wide
definition
2
[1]
of which would
include import clearing agents, for instance.
[15] It is important to
note that the Act is premised on a system of self-accounting and
self-assessment.
2
[2]
There exists
no viable method by which the Commissioner can keep track of all goods imported
that might result in customs duty being
payable under the Act, and whereby such
duties may be collected automatically. The Commissioner therefore verifies
compliance through
routine examinations and inspections and through action
precipitated by suspected
evasion.
2
[3]
[16] The
correct amount of customs and excise duty can only be determined if goods are
classified under the correct tariff heading,
and the value, quantity or volume
of the goods has been determined correctly. The Commissioner may make a written
determination
in order to set the applicable tariff heading or value in relation
to specific
goods.
2
[4]
[17] Such
determination will be subject to appeal to a high court, but any amount due in
terms of the determination shall be deemed
to be correct and shall remain
payable so long as the determination is in
force.
2
[5]
An appeal may be brought
within one year of such
determination.
2
[6]
The appeals
procedure envisaged by the above sections is based on the widely accepted
principle relating to the recovery of fiscal
claims of “pay now, argue
later”.
2
[7]
The provisions of
section 39(1)(b) that payment of duty is to be made on delivery of the bill of
entry is qualified by the following
proviso:
“Provided that the Commissioner may, on such conditions, including
conditions relating to security, as may be determined by
him, allow the
deferment of payment of duties due in respect of such relevant bills of entry
and for such periods as he may
specify.”
2
[8]
Interest,
fines, penalties and forfeitures
[18] The second category of
“debt” in respect of which the provisions of section 114 are
available to the Commissioner
comprises interest, fines, penalties and
forfeitures that have become payable. Interest is provided for in section 105
and does
not run on penalties or fines. The Act provides for fines upon
conviction for specific
offences.
2
[9]
Section 87(1)
provides that goods dealt with contrary to the provisions of the Act or in
respect of which an offence
3
[0]
was
committed, shall be liable to forfeiture. Section 93 provides for the remission
of penalties in the discretion of the Commissioner.
This would include
forfeiture. The Commissioner may demand payment of the value of the goods
liable to forfeiture in lieu of
forfeiture.
3
[1]
The reference in
section 114(1)(a)(ii) to forfeiture would include payment in lieu of forfeiture.
Section 105(c) provides as follows:
“[T]he Commissioner may on such conditions as he may consider necessary
–
(i) remit any interest for which any person is liable by virtue of this
section;
(ii) permit payment of any amount referred to in paragraph
(a)
by
instalments of such amounts and at such times as he may
determine”.
Goods subject to detention
and sale under section 114
[19] The goods subject to detention and sale
under section 114(1)(a)(ii) fall into the following five categories:
(i) any goods in a customs and excise warehouse or in the custody of the
Commissioner (including goods in a rebate store room) and
belonging to the
customs debtor;
(ii) any goods afterwards imported or exported by the customs debtor;
(iii) any imported goods in the possession or under the control of the customs
debtor
or on any premises in the possession or under the control of the
customs debtor;
(iv) any goods in respect of which an excise duty or fuel levy is prescribed
(whether or not such duty or levy has been paid) and
any materials for the
manufacture of such goods in the possession or under the control of the customs
debtor
or on any premises in the possession or under the control of the
customs debtor
;
(v) any vehicles, machinery, plant or equipment in the possession or under the
control of the customs debtor in which fuel in respect
of which any duty or levy
is prescribed (whether or not such duty or levy has been paid), is used,
transported or stored.
By virtue of section 114(3) such goods
would include the container of such goods.
[20] Section 114(1)(a)(ii)
authorises the detention of the goods, and stipulates that such goods shall be
subject to a lien until
the debt is paid. Section 114(1)(b) provides that the
claims of the State shall have priority over the claims of all other persons
upon anything subject to a lien, and may be enforced by sale of the goods
referred to above or by other proceedings if the debt is
not paid within three
months after the date on which it became due.
[21] Section 114 clearly
authorises the detention and sale of the goods of third parties, that is persons
who do not owe the section
114 debt to the
state.
3
[2]
Only the first category
of goods requires the goods to belong to the debtor.
[22] In relation to
the second category, there need be no physical or other nexus between the goods
belonging to a third party and
the customs debtor; the only requirement is that
the goods must have been imported or exported “afterwards”
(presumably
after the customs debt with which section 114(1)(a)(ii) is dealing,
arose) by the customs debtor. In relation to the fifth category
the only nexus
required by the section between the goods of third parties and the customs
debtor to render such goods subject to
detention and sale by the Commissioner,
is “possession or control” by the customs debtor; and as far as the
third and
fourth categories are concerned “possession or control” by
the customs debtor or the presence of such goods “on
any premises in the
possession or under the control” of the customs debtor.
[23] In
the context of section 114 the concept “possession or control” is of
wide signification. The Act seeks to spread
the enforcement and recovery wings
of the Commissioner as widely as possible. It is trite law that possession of a
movable requires
both physical control (
detentio
) and the necessary state
of mind (
animus
).
3
[3]
When
used in a statute the context will determine what state of mind is required for
possession in terms of such
statute.
3
[4]
At common law a
distinction is drawn between civil possession and natural possession. Under the
former the state of mind required
by the controller is that of keeping the
article for herself as if she were the owner; under the latter it is sufficient
if control
of the article is for her own
purpose.
3
[5]
In the case of other
statutes “possession” has been construed to mean physical control
plus the intention to control,
either for the possessor’s own purpose, or
on behalf of another; in the latter case little more than conscious physical
detention,
custody or control is
required.
3
[6]
Where, as in the
present case, the critical phrase conjoins “possession and control”,
this would cover not only an intention
to control for the possessor’s own
purpose but also mere conscious physical detention, custody or
control.
3
[7]
In the case of the
third and fourth categories above, the net is cast even wider, for all that is
required is the presence of the
goods in question “on any premises in the
possession or under the control” of the customs debtor. The customs
debtor
need only be in possession or control of the premises, not of the thing
itself; in fact she could be unaware of the presence of the
thing on the
premises in question.
The property
challenge
Introduction
[24] Although one of the vehicles owned
by FNB that is in issue in this case, namely the Volkswagen Jetta, was detained
by the Commissioner
on 16 February 1996, at a time when the Interim Constitution
was still in force, it does not follow that – in relation to the
property
right challenge – that Constitution is necessarily applicable. The High
Court proceedings in relation to this vehicle
were instituted on 27 January
1999, at a time when the 1996 Constitution was already in force. At this date,
FNB’s ownership
in the vehicle had not yet been taken away from it (to use
a clumsy but neutral expression), but was threatened. If the actual taking
away
would amount to an infringement of FNB’s constitutional property rights,
then a threat would be actionable under section
38 of the 1996
Constitution.
3
[8]
The threat was an
ongoing one and still persisted as an ongoing cause of action after that
Constitution came into force. Section
38
3
[9]
of the Constitution permits a
person to invoke the Bill of Rights in relation to both a
“threatened” as well as an actual
infringement of a right. I
accordingly propose to consider the constitutional property attack under section
25 of this Constitution
in respect of all the vehicles involved in the
case.
[25] Section 25
4
[0]
of
the Constitution in relevant part provides:
“25. Property.–
(1) No one may be deprived of property except in terms of law of general
application, and no law may permit arbitrary deprivation
of property.
(2) Property may be expropriated only in terms of law of general
application-
(a) for a public purpose or in the public interest; and
(b) subject to compensation, the amount of which and the time and manner of
payment of which have either been agreed to by those
affected or decided or
approved by a court.
(3) . . .
(4) For the purposes of this section
–
(a) the public interest includes the nation's commitment to land reform, and to
reforms to bring about equitable access to all South
Africa's natural resources;
and
(b) property is not limited to
land.
. . . .”
[26] It was contended on
behalf of FNB, both in the High Court and in this Court, that the detention and
sale by the Commissioner
under the provisions of section 114 of the motor
vehicles owned by FNB, under circumstances where FNB was not a customs debtor,
amounted
to an expropriation of the motor vehicles in question for purposes of
section 25 of the Constitution. Neither section 114, nor any
other provision of
the Act provided for the payment of compensation for such expropriation as
mandated by section 25(2)(b) of the
Constitution. Accordingly, it was
submitted, the provisions of section 114 of the Act that authorised such
expropriation were inconsistent
with section 25(1) of the Constitution and
invalid.
The High Court’s judgment on the property
attack
[27] With regard to the property attack, the High Court found
that the detention mechanism of section 114 was similar to the common
law lien
and the landlord’s hypothec, both of which “may operate to defeat
the rights of the owner of goods falling under
the
lien”
4
[1]
. Mere detention
without sale “does not deprive the owner of his ownership”, and any
limitation of the property clause
would therefore only arise upon sale of the
goods so detained.
4
[2]
Regarding
the power to sell the goods of third parties, the judge referred to the wide
definition of an importer as “the person
liable for customs
duty”
4
[3]
. Under this
definition, the “master of a ship or pilot of an aircraft may be liable
for duty”.
4
[4]
The judge then
reasoned that section 114 created “subsidiary categories of co-principal
tax debtors”.
4
[5]
Taxation
could not amount to deprivation or
expropriation.
4
[6]
The following
passage is instructive of his
reasoning:
4
[7]
“To the extent that the goods of affected owners are in the possession or
under the control of the customs debtor (the importer),
such owners themselves
become liable for customs duty. The tax is, to all intents and purposes,
extended to them. If this seems
inequitable, the answer is that there is no
equity about a tax. It is not more inequitable that a credit grantor should
suffer than
that the master of a ship should in certain circumstances incur
liability.”
[28] In relation to goods liable to detention
under section 114(1)(a)(ii) the judge drew a
distinction
4
[8]
between a
“credit grantor”, who finances the sale or long term lease of such
goods to the customs debtor and into which
category FNB is placed; and
“affected owners”. Affected owners are in turn divided into
affected owners who, not being
credit grantors, stand in some other contractual
relationship with the customs debtor in relation to the goods in question, and
affected
owners who do not and who have not given possession of such goods to
the customs debtor, but such goods “happen to be on premises
in the
custody or control of the customs
debtor”.
4
[9]
[29] The
judge assumed that the ownership of a credit grantor who was concerned mainly
with security for his claim would qualify
for constitutional
protection,
5
[0]
but ruled that under
section 114 no expropriation takes place “as that word is commonly
understood”.
5
[1]
Significantly though, this finding is limited to the property of credit
grantors.
5
[2]
After finding that
the lien upon and the sale of a credit grantor’s goods under the section
does not amount to expropriation,
the judge proceeds to consider whether the
impact of section 114 in relation to the goods of affected owners could be
justified in
free and democratic
countries.
5
[3]
In doing so the
judge also, in certain passages in the judgment, deals with justification in
relation to credit
grantors.
5
[4]
[30] With
regard to justification the court found that no less invasive methods than
section 114 had been made out as viable
alternatives,
5
[5]
and that
“some democratic countries permit the attachment either of goods belonging
to credit grantors or of goods (such as
tools or equipment) used in the customs
debtor’s
enterprise”.
5
[6]
Owners in a
contractual relationship with the customs debtor would have a claim for the
value of the goods seized, although owners
without such a relationship might
have only an enrichment claim.
5
[7]
The revenue derived from selling the goods of third parties was probably
“next to nothing”
5
[8]
,
but the “coercive effect on a shipping agent of having its
customers’ goods attached as security for duty which it owes
must be
considerable”.
5
[9]
The judge
concluded that the “decision on where the burden of taxation should fall
is a policy
one”.
6
[0]
[31] Before
considering the relevant constitutional property provisions it is convenient to
deal with the High Court’s analysis
of the section 114 mechanism
summarised in paragraph 30 above. In doing so it is first necessary to
emphasise that even fiscal statutory
provisions, no matter how indispensable
they may be for the economic well-being of the country – a legitimate
governmental
objective of undisputed high priority – are not immune to
the discipline of the Constitution and must conform to its normative
standards.
Moreover section 39(2) of the Constitution provides that:
“When interpreting any legislation, and when developing the common law or
customary law, every court, tribunal or forum must
promote the spirit, purport
and objects of the Bill of
Rights.”
6
[1]
In
the
Carmichele
case
6
[2]
this
Court held that the obligation of courts to develop the common law, in the
context of the section 39(2) objectives, is not purely
discretionary but that
the courts are under a general obligation to develop the common law
appropriately where it is deficient, as
it stands, in promoting the section
39(2) objectives. There is a like obligation on the courts, when interpreting
any legislation
– including fiscal legislation – to promote those
objectives.
[32]
[ The keystone of the High
Court’s analysis of section 114 is the conclusion that section 114 turns
third parties (credit-grantors
and affected owners) into co-principal debtors,
who are liable, with the customs debtor, for payment of the customs duty debt in
question. I am unaware of any authority, and none has been cited to us, for the
proposition that a person having a lien over the
property of a third party
thereby acquires an independent cause of action against the third party owner.
In fact authority is to
the contrary. In
Buzzard Electrical (Pty) Ltd v 158
Jan Smuts Avenue Investments (Pty)
Ltd
6
[3]
the Supreme Court of
Appeal confirmed that a lien did not exist
in vacuo
but
to secure or
reinforce
(“ter versekering of versterking”) an underlying
claim; accordingly neither a direct nor an indirect enrichment claim
could be
entertained if there had been no unjustified enrichment of the owner; it
constitutes no more than a defence against the
owner’s
rei vindicatio.
Eiselen and Pienaar
Unjustified
Enrichment
6
[4]
express the
principle aptly as follows:
“The lien or retention right is an ancillary right which supports the main
claim, but is also dependent on it. In all cases
where a party relies on a
retention right the onus is on that party to prove the existence of the main
claim without which it cannot
survive.”
[33] A lien is a
right conferred on the possessor of another’s property, on which the
possessor has expended money or labour,
to retain possession of such property
until properly compensated, either under contract or on the basis of unjustified
enrichment.
6
[5]
The fact that at
common law the
fiscus
enjoyed a legal hypothec over the property of its
citizens in respect of taxes and dues owing by them to the
State
6
[6]
takes the matter no
further, for the hypothec was only on the goods of the tax debtor. This
hypothec was abolished by section 86
of the Insolvency Act, 32 of
1916.
6
[7]
When the equivalent
statutory lien was introduced for the first time in section 142(1) of the
Customs Act, 35 of 1944 it related
only to the goods of the customs
debtor.
[34] It is against this background that the effect of the lien
under section 114(1)(a)(ii) must be considered. In my view such lien,
to the
extent that it relates to the property of third parties who are not customs
debtors, does no more than provide a further execution
object for the recovery
of the debt from the relevant customs debtor. There is nothing in the wording
or purpose of this section
providing for the statutory “lien” to
suggest that a radical departure from the fundamental legal principles relating
to liens, referred to above, is envisaged. Least of all that a new and highly
unusual form of co-principal customs duty liability
is being
created.
[35] As far as section 114 creates a lien over the property of
third parties and enables the Commissioner to sell such property in
execution of
a customs debtor’s obligation under the section, such liens over the
property of third parties cannot, in my view,
be equated with that of the common
law lien or the landlord’s hypothec, as found by the High
Court.
[36] Unlike the case of common law liens, section 114 does not
establish any significant nexus between the creditor (the Commissioner)
and the
non-debtor third party over whose property a lien is created. The provisions of
section 114(1)(a)(ii) are so expansive –
as indicated earlier in this
judgment – that they can embrace goods of third parties under factual
circumstances where there
is no other legal relationship, or indeed any other
relationship at all, between the third party in question and the Commissioner,
or the third party and the customs debtor. Under such circumstances there would
be no analogy at all between the lien under the
section and any common-law
lien.
[37] Dealing with the perceived inequity resulting from the
conclusion reached by the judge, in the passage quoted in para 27 above,
to the
effect that the tax liability of the customs debtor is extended to the third
party, the judge remarked that –
“ . . . there is no equity about a tax. It is not more inequitable that a
credit grantor should suffer than that the master
of a ship should in certain
circumstances incur liability.”
The flaw in this
reasoning is that section 114 does not make the third party a customs debtor; it
makes the goods of that party liable
to be seized in execution of someone
else’s customs debt. The third party does not become a co-debtor and has
no liability
to the Commissioner to pay any tax at all. If the property is
realised and there is a balance due on the tax debt, that remains
the
responsibility of the customs debtor. The question here is not about equity in
tax, but whether it is constitutionally permissible
to seize a third
party’s property for another person’s customs debt.
[38] The
detention of the goods could continue indefinitely, until such time as sold by
the Commissioner or in execution by a creditor
with an unsatisfied judgment
against the owner. In this latter event the Commissioner would, by virtue of
the section 114 lien,
enjoy preference on the proceeds of the sale. In any of
these events the Commissioner has the power to deprive FNB permanently of
all
its rights and benefits as owner of the vehicles. In practice, however, it is
most improbable that the Commissioner would not
sell the detained goods and such
detention therefore constitutes a continuing and real threat of sale. The
crucial issue to be determined
on this part of the case is accordingly whether,
in the absence of a relevant nexus between the goods and the customs debtor, the
sale by the Commissioner – under section 114 of the Act – of goods
owned by someone who is not a customs debtor, amounts
to an unjustifiable
infringement of the owner’s section 25 property rights.
[39] The
issue must be so broadly framed, without making any distinction between the
position of FNB as credit grantor and the position
of any other affected owner.
This is so because section 114(1)(a)(ii) is itself couched in expansive general
terms identifying the
targeted goods solely on the basis of some or other form
of possessory relationship between the customs debtor and such goods. In
relation to the targeted goods, the section draws no distinction between any
categories of non-customs debtor owners of such goods.
The different possible
categories of such owners are legion.
[40] It may have been possible for
the legislature to have devised a narrower category of non-debtor owners, for
purposes of the
section, which may or may not have passed constitutional muster.
It is unnecessary to decide this. The legislature has not chosen
to do so. It
is not this Court’s function to attempt to select such categories from a
maze of them, nor to speculate –
for that is what it would amount to
– about what the legislature might have done had it formulated the section
with the idea
of constitutional compatibility in mind. Under these
circumstances it is impermissible for this Court to attempt to formulate a
narrower set of categories of third parties falling within the purview of
section 114(1)(a)(ii) and only to consider the section’s
constitutionality
in respect of such categories; this would in effect be a legislative
act.
6
[8]
Section 114 is certainly
not the sort of provision that is reasonably capable of a narrower construction
in conformity with the
Constitution.
6
[9]
The
property challenge issues
[41] A preliminary question is whether FNB, as
a juristic person, is entitled to the property rights protected by section 25 of
the
Constitution. In this regard section 8(4) of the Constitution provides as
follows:
“A juristic person is entitled to the rights in the Bill of Rights to the
extent required by the nature of the rights and the
nature of that juristic
person.”
[42] In the
First Certification
case
7
[0]
an objection was raised
that, inconsistently with Constitutional Principle II, the extension of the
rights guaranteed by the Bill
of Rights to juristic persons would diminish the
rights of natural persons. This Court rejected the objection in the following
terms:
“ . . . [M]any ‘universally accepted fundamental rights’ will
be fully recognised only if afforded to juristic
persons as well as natural
persons. For example, freedom of speech, to be given proper effect, must be
afforded to the media, which
are often owned or controlled by juristic persons.
While it is true that some rights are not appropriate to enjoyment by juristic
persons, the text of NT 8(4) specifically recognises this. The text also
recognises that the nature of a juristic person may be
taken into account by a
court in determining whether a particular right is available to such person or
not.”
7
[1]
In
the
Hyundai
case
7
[2]
this
Court held that although juristic persons are not the bearers of dignity they
are entitled to the right to privacy although
their privacy rights “can
never be as intense as those of human
beings”.
7
[3]
Exclusion of
juristic persons from the right to privacy –
“ . . . would lead to the possibility of grave violations of privacy in
our society, with serious implications for the conduct
of affairs. The State
might, for instance, have free licence to search and seize material from any
non-profit organisation or corporate
entity at will. This would obviously lead
to grave disruptions and would undermine the very fabric of our democratic
State. Juristic
persons therefore do enjoy the right to privacy, although not
to the same extent as natural
persons.”
7
[4]
[43] We
are here dealing with a public company. It is trite that a company is a legal
entity altogether separate and distinct from
its members, that its continued
existence is independent of the continued existence of its members, and that its
assets are its exclusive
property.
7
[5]
Nevertheless, a
shareholder in a company has a financial interest in the dividends paid by the
company and in its success or failure
because she “ . . . is entitled to
an aliquot share in the distribution of the surplus assets when the company is
wound up”.
7
[6]
No matter how
complex the holding structure of a company or groups of companies may be,
ultimately – in the vast majority
of cases – the holders of shares
are natural persons.
[44] More important, for present purposes, is the
universal phenomenon that natural persons are increasingly forming companies and
purchasing shares in companies for a wide variety of legitimate purposes,
including earning a livelihood, making investments and
for structuring a pension
scheme. The use of companies has come to be regarded as indispensable for the
conduct of business, whether
large or small. It is in today’s world
difficult to conceive of meaningful business activity without the institution
and utilisation
of companies.
[45] Even more so than in relation to the
right to privacy, denying companies entitlement to property rights would “
. . .
lead to grave disruptions and would undermine the very fabric of our
democratic State”.
7
[7]
It
would have a disastrous impact on the business world generally, on creditors of
companies and, more especially, on shareholders
in companies. The property
rights of natural persons can only be fully and properly realised if such rights
are afforded to companies
as well as to natural persons. I therefore conclude
that FNB is entitled to the property rights under section 25 of the
Constitution,
its provisions having been quoted in paragraph 25 above. I
accordingly proceed to consider the property challenge.
[46] The
following questions arise:
(a) Does that which is taken away from FNB by the operation of section 114
amount to “property” for purpose of section
25?
(b) Has there been a deprivation of such property by the Commissioner?
(c) If there has, is such deprivation consistent with the provisions of section
25(1)?
(d) If not, is such deprivation justified under section 36 of the
Constitution?
(e) If it is, does it amount to expropriation for purpose of section 25(2)?
(f) If so, does the deprivation comply with the requirements of section 25(2)(a)
and (b)?
(g) If not, is the expropriation justified under section
36?
Before turning to these issues it is essential, by way of
introduction, to consider the meaning of section 25 more broadly and in
a more
comprehensive context.
The Meaning of section 25:
Introduction
[47] Constitutional property clauses are notoriously
difficult to interpret
7
[8]
and it is
unlikely that the interpretation of section 25 of the Constitution will be
wholly spared these problems. A court is therefore
fortunate, at this
relatively early stage of section 25 jurisprudence, to have at its disposal a
considerable body of work produced
by South African scholars in the
field.
7
[9]
In this judgment heavy
reliance is placed on such work and the assistance derived therefrom gratefully
acknowledged.
[48] Section 25 embodies a negative protection of property
and does not expressly
guarantee the right to acquire, hold and dispose of
property. This was one of the major objections raised against the section and
rejected by this Court in the
First Certification
case.
8
[0]
After referring to the
wide variety of formulations of the right to property in the constitutions and
bills of rights of recognised
democracies, the Court on that occasion pointed
out that no universally recognised formulation of the right to property exists
and
held that the “[p]rotection for the holding of property is implicit in
[section] 25”.
8
[1]
Subsection
(4)(b) makes plain that for purposes of the section “property is not
limited to land”.
[49] The subsections which have specifically to
be interpreted in the present case must not be construed in isolation, but in
the
context of the other provisions of section 25 and their historical context,
and indeed in the context of the Constitution as a whole.
Subsections (4) to
(9)
8
[2]
all, in one way or another,
underline the need for and aim at redressing one of the most enduring legacies
of racial discrimination
in the past, namely the grossly unequal distribution of
land in South Africa. The details of these provisions are not directly relevant
to the present case, but ought to be borne in mind whenever section 25 is being
construed, because they emphasise that under the
1996 Constitution the
protection of property as an individual right is not absolute but subject to
societal considerations.
[50] The preamble to the Constitution indicates
that one of the purposes of its adoption was to establish a society based, not
only
on “democratic values” and “fundamental human
rights” but also on “social justice”. Moreover
the Bill of
Rights places positive obligations on the state in regard to various social and
economic rights.
8
[3]
Van der Walt
(1997)
8
[4]
aptly explains the
tensions that exists within section 25:
“[T]he meaning of section 25 has to be determined, in each specific case,
within an interpretative framework that takes due
cognisance of the inevitable
tensions which characterize the operation of the property clause. This tension
between individual rights
and social responsibilities has to be the guiding
principle in terms of which the section is analysed, interpreted and applied in
every individual case.”
The purpose of section 25 has
to be seen both as protecting existing private property rights as well as
serving the public interest,
mainly in the sphere of land reform but not limited
thereto, and also as striking a proportionate balance between these two
functions.
8
[5]
The meaning
of property in section 25 as applied to the present case
[51] For
purposes of the High Court judgment Conradie J did not find it necessary to
decide whether what was taken from FNB under
section 114 of the Act amounted to
“property” for purposes of section 25 but assumed, without deciding,
that it did.
At this stage of our constitutional jurisprudence it is, for the
reasons given above, practically impossible to furnish –
and judicially
unwise to attempt – a comprehensive definition of property for purposes of
section 25. Such difficulties do
not, however, arise in the present case. Here
it is sufficient to hold that ownership of a corporeal movable must – as
must
ownership of land – lie at the heart of our constitutional concept of
property, both as regards the nature of the right involved
as well as the object
of the right and must therefore, in principle, enjoy the protection of section
25.
8
[6]
[52] When
considering the purpose and content of the property clause it is necessary, as
Van der Walt (1997)
8
[7]
puts it
–
“ . . . to move away from a static, typically private-law conceptualist
view of the constitution as a guarantee of the
status quo
to a dynamic,
typically public-law view of the constitution as an instrument for social change
and transformation under the auspices
[and I would add ‘and
control’] of entrenched constitutional
values.”
8
[8]
That
property should also serve the public good is an idea by no means foreign to
pre-constitutional property
concepts.
8
[9]
[53] It was
however contended on behalf of the respondents that FNB’s ownership in the
vehicles was “nothing more”
than “a contractual device which
reserves ‘ownership’ of the vehicles in question [to FNB]”
which “together
with a range of other clauses in the relevant contracts,
are designed to protect the Bank” and that the Constitution did not
seek
to protect “the reservation of ownership rights in leased goods by
financial institutions”. We were pressed in
argument with the following
passage from the judgment of the European Court of Human Rights in the
Gasus
case:
9
[0]
“Whatever the nature of retention of title compared with
‘true’ or ‘ordinary’ property rights –
a question
on which the Court discerns no common ground among the Contracting States
– it is apparent that whoever sells goods
subject to retention of title is
not interested so much in maintaining the link of ownership with the goods
themselves as in receiving
the purchase price.”
The
essence of the submission is that the constitutional concept of property is
dependent on the use made of the property by the rights
holder – since FNB
does not use the vehicles for driving, it cannot claim constitutional protection
under section 25.
[54] This submission cannot be sustained. The fact
that an owner of a corporeal movable makes no, or limited use of the object in
question, is irrelevant to the categorisation of the object as constitutional
property. It may be relevant to deciding whether a
deprivation thereof is
arbitrary and, if it is, whether such deprivation is justified under section 36
of the Constitution. We are
here dealing only with corporeal movables and it is
unnecessary to go any wider.
[55] The argument moreover incorrectly
conflates the legal right and the commercial interest that FNB has in the
vehicles in question.
At the time when FNB concluded the relevant contracts it
was the owner of all the vehicles. The “
reservation
of
ownership” is not what the inquiry should focus on. This is no more than
the description of the effect of a contractual
term in the agreement. The fact
that the agreements contemplate a stage when FNB might cease to be owner cannot
affect the characterisation
of its right of ownership for as long as it remains
owner. Instead, it is FNB’s ownership of the vehicle, and nothing else,
that entitles it to treat the vehicle as an execution object in the event of its
debtor defaulting under the agreement in question,
or affords it a special
advantage in insolvency. This is the essence of why a lease of moveables is
viable; there is no need for
further security since the ownership of the asset
leased provides adequate security.
[56] Neither the subjective interest
of the owner in the thing owned, nor the economic value of the right of
ownership, having regard
to the other terms of the agreement, can determine the
characterisation of the right. It does not matter that the owner would rather
have the purchase price than the vehicle, nor that the economic value of the
right of ownership might be small when the contract
term draws to an end. A
speculator has no less a right of ownership in goods purchased exclusively for
resale merely because she
has no subjective interest in them but sees them only
as objects that will produce money on resale. I accordingly conclude that
the
right of ownership that FNB has in the vehicles in question constitutes property
for purposes of section 25.
The approach to deprivation in the context
of section 25
[57] The term “deprive” or
“deprivation” is, as Van der Walt (1997) points
out,
9
[1]
somewhat misleading or
confusing because it can create the wrong impression that it invariably refers
to the taking away of property,
whereas in fact
“the term ‘deprivation’ is distinguished very clearly from the
narrower term ‘expropriation’ in constitutional
jurisprudence
worldwide.”
9
[2]
In
a certain sense any interference with the use, enjoyment or exploitation of
private property involves some deprivation in respect
of the person having title
or right to or in the property concerned. If section 25 is applied to this wide
genus
of interference, “deprivation” would encompass all
species thereof and “expropriation” would apply only to
a narrower
species of interference. Chaskalson and Lewis, using a slightly different idiom
and dealing with both the interim and
1996 Constitutions, put it equally
correctly thus:
“Expropriations are treated as a subset of deprivations. There are
certain requirements for the validity of all
deprivations.”
9
[3]
[58] Viewed
from this perspective section 25(1) deals with all “property” and
all deprivations (including expropriations).
If the deprivation infringes
(limits) section 25(1) and cannot be justified under section 36 that is the end
of the matter. The
provision is unconstitutional.
[59] If, however, the
deprivation passes scrutiny under section 25(1) (i.e. it does not infringe
section 25(1) or, if it does, is
a justified limitation) then the question
arises as to whether it is an expropriation. If the deprivation amounts to an
expropriation
then it must pass scrutiny under section 25(2)(a) and make
provision for compensation under section
25(2)(b).
9
[4]
Various writers, when
dealing with the interrelation between deprivations and expropriations under
section 25 refer to pre-constitutional
judgments on expropriation. This must
always be done circumspectly, because such judgments are not necessarily
reliable when it
comes to interpreting the property clauses under the interim
and 1996 Constitutions.
[60] The starting point for constitutional
analysis, when considering any challenge under section 25 for the infringement
of property
rights, must be section 25(1).
The meaning of
“arbitrary” in section
25
Introduction
[61] Dispossessing an owner of all rights, use
and benefit to and of corporeal movable goods, is a prime example of deprivation
in
both its grammatical and contextual sense. The infringement issue in relation
to section 25(1) is thus really limited to determining
whether the deprivation
of property enacted by section 114 is “arbitrary”, within the
meaning of that concept as employed
in section
25(1)
9
[5]
of the Constitution,
because section 114 clearly constitutes a law of general
application.
[62] The word “arbitrary”, depending on its
statutory context, may only impose a low level of judicial scrutiny, requiring
nothing more than the absence of bias or bad faith to satisfy such scrutiny.
For example, it has been held to mean “capricious
or proceeding merely
from the will and not based on reason or
principle”.
9
[6]
[63] But
context is all-important; as Lord Steyn observed in
R v Secretary of State
for the Home Department, ex parte
Daly
:
9
[7]
“The differences in approach between the traditional grounds of review and
the proportionality approach may therefore sometimes
yield different results . .
. This does not mean that there has been a shift to merits review. On the
contrary . . . the respective
roles of judges and administrators are
fundamentally distinct and will remain so . . . Laws LJ (at 847 (para 18))
rightly emphasised
in
Mahmood’s case [R (Mahmood) v Secretary of State
for the Home Dept
[2000] EWCA Civ 315
;
[2001] 1 WLR 840]
‘that the intensity of review in a
public law case will depend on the subject matter in hand’. That is so
even in a
case involving convention rights. In the law context is
everything.” (Emphasis supplied.)
Context is crucial,
both in the sense that the concept “arbitrary” appears in a
constitution, and in the sense that it
must be construed as part of a
comprehensive and coherent Bill of Rights in a comprehensive and coherent
constitution. This is certainly
all part of the context.
[64] Yet
context goes further and would include the particular international
jurisprudential context in which the Constitution came
into existence and
presently functions. Section 39(1) of the Constitution provides that a court,
when interpreting the Bill of Rights,
“must consider international
law” and “may consider foreign law”. At the same time one
should never lose
sight of the historical context in which the property clause
came into existence. The background is one of conquest, as a consequence
of
which there was a taking of land in circumstances which, to this day, are a
source of pain and tension. As already mentioned,
the purpose of section 25 is
not merely to protect private property but also to advance the public interest
in relation to property.
Thus it is necessary not only to have regard to
foreign law, but also to the peculiar circumstances of our own history and the
provisions
of our Constitution. In the present case all this would be relevant
to determining what purpose the word “arbitrary”
was intended to
serve in a Constitution which has established a constitutional state and in a
provision therein dealing with the
protection of property against deprivation by
the state. It must be construed in a manner that is appropriate to determining
whether
the section 25(1) protection of property against deprivation for which
no compensation is payable has been infringed (limited).
[65] In its
context “arbitrary”, as used in section 25, is not limited to
non-rational deprivations, in the sense of
there being no rational connection
between means and ends. It refers to a wider concept and a broader controlling
principle that
is more demanding than an enquiry into mere rationality. At the
same time it is a narrower and less intrusive concept than that
of the
proportionality evaluation required by the limitation provisions of section 36.
This is so because the standard set in section
36 is
“reasonableness” and “justifiability”, whilst the
standard set in section 25 is “arbitrariness”.
This distinction
must be kept in mind when interpreting and applying the two
sections.
[66] It is important in every case in which section 25(1) is
in issue to have regard to the legislative context
to which
the
prohibition against “arbitrary” deprivation has to be applied; and
also to the nature and extent of the deprivation.
In certain circumstances the
legislative deprivation might be such that no more than a rational connection
between means and ends
would be required, while in others the ends would have to
be more compelling to prevent the deprivation from being
arbitrary.
[67] De Waal et
al
9
[8]
are of the view that a
deprivation “is arbitrary” for purposes of section 25(1) “if
it follows unfair procedures,
if it is irrational, or is for no good
reason”. The protection against unfair procedure has particular relevance
to administrative
action – which protection is provided for under section
33 of the Constitution – but it could also apply to legislation
and be
relevant to determining whether, in the light of any procedure prescribed, the
deprivation is arbitrary. Although the learned
authors conclude that –
“the substantive element of s 25(1)’s non-arbitrariness requirement
probably does not involve a proportionality
enquiry”,
9
[9]
their
conclusion that deprivation would be arbitrary if it took place “for no
good reason” seems to import a stricter
evaluative norm than mere
rationality, although less strict than the proportionality evaluation under
section 36.
[68] Chaskalson and
Lewis,
10
[0]
as well as
Budlender,
10
[1]
contest the view
that “arbitrary” in section 25(1) of the 1996 Constitution imports
anything more than non-rationality
and rely in this regard on this Court’s
judgment in
Lawrence
.
10
[2]
After referring to the judgment, Chaskalson and Lewis state the
following:
“The court stated that legislative measures are arbitrary when they bear
no rational relationship to the legislative goal they
are intended to achieve.
In so doing the court equated a ‘non-arbitrary’ standard of review
with the ‘rationality
review’ standard of minimal scrutiny in United
States equality law. It emphasized that the prohibition against arbitrariness
did not involve a proportionality enquiry between means and ends, but only a
rationality enquiry. The proportionality enquiry was
excluded in order
‘to maintain the proper balance between the roles of the legislature and
the courts’: in a democratic
society it is not the function of courts to
sit in judgment over the merits of socio-economic policies of the
legislature.”
10
[3]
(Footnotes omitted.)
In this passage the learned authors seek
to extrapolate the dicta in
Lawrence
and raise them to a level of
generality in a manner not warranted by the constitutional context in which
Lawrence
was decided.
[69] The
Lawrence
case was concerned
with certain provisions of the Liquor Act 27 of 1989 that restricted trading in
wine under a grocer’s wine
licence. The constitutionality of the
provisions was challenged, amongst others, on the grounds that they infringed
the right to
free economic activity as guaranteed by section 26 of the interim
Constitution.
10
[4]
The case was
not concerned with the meaning of “arbitrary”. That word did not
appear in section 26, or in the Liquor
Act. What was an issue in
Lawrence
’s case was the meaning to be given to a proviso to section
26 that excluded certain measures from the protection given by section
26 (1) to
free economic activity if they were “justifiable in an open and democratic
society based on freedom and equality”.
Chaskalson P held that, in the
context of section 26, measures that were arbitrary would be inconsistent with
“values which
underlie an open and democratic society based on freedom and
equality” and would not pass constitutional scrutiny. The judgment
went
on to hold that if a broad meaning were to be given to the right to engage
freely in economic activity under section 26(1),
an equally broad meaning would
have to be given to the power of the State to pass measures restricting economic
activity under section
26(2). In that context, it was held that the provisions
of section 26(2) would be met by measures embodying a rational relationship
between means and ends. Absent such relationship, the measure would be
arbitrary and would not pass constitutional
scrutiny.
10
[5]
That decision
provides no authority for the manner in which “arbitrary” should be
construed in the context of the property
provisions of section 25 of the
Constitution.
[70] The present case does not deal with the
implementation of legislative policies, whether social or economic, nor does it
deal
with mere differentiation in the context of equality jurisprudence. We are
here concerned with statutory provisions in customs and
excise legislation that
deprive an owner of property for someone else’s customs debt. I
accordingly find the approach of Chaskalson
and Lewis unpersuasive in this
regard and for the same reasons am unable to accept the views of
Budlender,
10
[6]
also based heavily
on the
Lawrence
judgment. At the same time, I also cannot support the
suggestion of Van der Walt that deprivations may have to comply with both
the
requirements of section 25 and the general requirements of section
36.
10
[7]
If the deprivation is
not arbitrary, the section 25(1) right is not limited and the question of
justification under section 36 does
not arise.
Comparative law on
deprivation of property
[71] There is broad support in other
jurisdictions for an approach based on some concept of proportionality when
dealing with deprivation
of property, although the context and analytical
methodology are not the same as under our Constitution. It is useful to
consider
approaches followed in other democratic systems before attempting to
conclude what “arbitrary” deprivation means under
section 25 of our
Constitution.
The United States of America
[72] The Fifth and
Fourteenth Amendments to the Constitution of the United States of America
together form the oldest, most well-known
constitutional guarantee of property
rights:
“Amendment V
10
[8]
No person shall be held to answer for a capital, or otherwise infamous crime,
unless on a presentment or indictment of a Grand Jury,
[. . .] nor be deprived
of life, liberty, or property, without due process of law; nor shall private
property be taken for public
use without just compensation.
. . . .
Amendment XIV, Section 1
10
[9]
[. . . ] No State shall make or enforce any law which shall abridge the
privileges or immunities of citizens of the United States;
nor shall any State
deprive any person of life, liberty, or property, without due process of law;
nor deny to any person within its
jurisdiction the equal protection of the
laws.”
[73] The Fifth Amendment contains two parts.
The first may be referred to as the “due process clause” which
provides
that nobody shall be deprived of property without due process of law.
The second is the so-called “takings clause” which
provides that
private property shall not be taken for public use without just
compensation.
11
[0]
For present
purposes the takings clause needs to be considered. It should be noted that the
Fifth Amendment refers to a
taking
and that this term has a different
meaning to that of expropriation or of compulsory acquisition as it is generally
understood.
Van der Walt puts it
thus:
11
[1]
“The crucial feature that sets US takings law apart from the position in
most other jurisdictions is the distinction between
a ‘taking’ and
an expropriation. ‘Taking’ as referred to in the Fifth Amendment,
is a wide term that includes
the narrower, more widely known category of formal
expropriations or compulsory acquisitions in terms of the power of eminent
domain,
but it also extends to a further category of state actions that have the
form of police power regulations of property but in effect
amount to takings
because they ‘go too far’.”
As Holmes J
expressed it in
Pennsylvania Coal Co v Mahon
[1922] USSC 193
;
260 US 393
(1922) at 415:
“The general rule at least is that while property may be regulated to a
certain extent, if regulation goes too
far it will be recognized as a
taking.” This conclusion followed from the reasoning that –
“[g]overnment hardly could go on if to some extent values incident to
property could not be diminished without paying for every
such change in the
general law. As long recognized some values are enjoyed under an implied
limitation and must yield to the police
power. But obviously the implied
limitation must have its limits or the contract and due process clauses are
gone. One fact for
consideration in determining such limits is the extent of
the diminution. When it reaches a certain magnitude, in most if not in
all
cases there must be an exercise of eminent domain and compensation to sustain
the act. So the question depends upon the particular
facts. The greatest
weight is given to the judgment of the legislature but it always is open to
interested parties to contend that
the legislature has gone beyond its
constitutional
power.”
11
[2]
[74] It
has been customary to refer to the regulatory powers of government as the
police power
and to government’s power of expropriation as the
power of
eminent domain
. While these tags are useful analytical tools,
the above passage from Van der Walt (1999) illustrates that the exercise of the
police
power may in exceptional circumstances constitute a
‘taking’.
[75]
( Although the concept of
proportionality is seldom used by name when American courts determine the
takings issue, the courts do appear
to employ some sort of proportionality
analysis. This appears from the test laid down by the Supreme Court in
Dolan
v City of Tigard
11
[3]
to determine whether a city council’s conditions for approving a
building permit exacted such dedications of land as to amount
to an
impermissible uncompensated taking notwithstanding the clear relationship
between such conditions and the council’s legitimate
government purpose.
Rehnquist CJ, who delivered the opinion of the Court, laid down a “rough
proportionality” test to
decide individual
cases:
11
[4]
“We think the ‘reasonable relationship’ test adopted by a
majority of the state courts is closer to the federal
constitutional norm than
either of those previously discussed. But we do not adopt it as such, partly
because the term ‘reasonable
relationship’ seems confusingly similar
to the term ‘rational basis’ which describes the minimal level of
scrutiny
under the Equal Protection Clause of the Fourteenth Amendment. We
think a term such as ‘rough proportionality’ best
encapsulates what
we hold to be the requirement of the Fifth Amendment. No precise mathematical
calculation is required, but the
city must make some sort of individualized
determination that the required dedication is related both in nature and extent
to the
impact of the proposed
development.”
Australia
[76] Section
51(xxxi) of the Australian Constitution is the oldest constitutional property
guarantee in a written Commonwealth
constitution.
11
[5]
It empowers
the federal government to expropriate property but requires compensation upon
such acquisition. It is concerned with
the legislative powers of the federal
government (“the Commonwealth”). As such, it is not part of a
traditional Bill
of Rights, but serves that purpose by constraining the power of
the federal government – it has no authority to enact legislation
acquiring property without just terms. There is no provision in the Australian
Constitution dealing explicitly with the regulation
of property. Section
51(xxxi) provides as follows:
“51. The Parliament shall, subject to this Constitution, have power to
make laws for the peace, order and good government
of the Commonwealth with
respect to:
[ . . . ]
(xxxi) the acquisition of property on just terms from any State or person for
any purpose in respect of which the Parliament has
the power to make
laws.”
[77] The Australian High Court has
taken a strict view against the circumvention of section 51(xxxi) by doing
indirectly what the
state has been prohibited from doing
directly.
11
[6]
Emphasis is placed
on substance and not on form. The courts have, however, developed a doctrine
around the regulation of property
(including the dispossession of property)
where the regulation in question, although not falling within the ambit of
section 51(xxxi),
is nevertheless considered lawful despite the fact that no
“just terms” are provided for.
[78] As foreshadowed above,
not every compulsory acquisition of property by the Federal Government falls
under section 51(xxxi).
The courts require not only (i) an acquisition, but
also an acquisition (ii)
for the purposes of section 51(xxxi)
. In this
regard the dispossession of property will only qualify as an
acquisition
if some resulting benefit or advantage to the state can be
identified.
11
[7]
As to the second
test, a law that adjusts or resolves competing claims or that provides for the
creation, modification, extinction
or transfer of rights and liabilities as an
incident of or a means of enforcing some general regulation of the conduct,
rights and
obligations of citizens in relationships or areas which need to be
regulated in the common interest, is not a law as meant in section
51(xxxi) of
the Constitution.
11
[8]
Any
acquisition in terms of such a law is seen as an “incidental
benefit” and not one for the purposes of section 51(xxxi).
It is thus a
question of characterising the legislation.
[79]
(
Re Director of Public
Prosecutions; Ex Parte Lawler and
Another
11
[9]
dealt with the
forfeiture without compensation of a leased fishing vessel which had been caught
fishing unlawfully. The owners were
unaware that their vessel was being used in
this manner. They attacked the statutory provision allowing for forfeiture as
contravening
section 51(xxxi). The Australian High Court held that the
forfeiture in question did not constitute an acquisition of property within
section 51(xxxi) but part of valid regulatory
provisions.
[80]
(
Airservices Australia
v Canadian Airlines International
Ltd
12
[0]
dealt with a
statutory lien and the sale of aircraft in pursuance thereof. Airservices
provided air traffic control and related
services as the government air
authority. It had the right to charge a fee “reasonably related to the
expenses it incurred”
but not such as to “amount to taxation”.
This fee was substantial. The fees were payable by air operators. Such
operators
did not necessarily own the aircraft they fly. Nevertheless, if the
charges were outstanding for nine months, Airservices could
impose a statutory
lien over any aircraft operated by the debtor and sell it to recover the
charges.
[81] In litigation concerning such a
statutory lien the constitutionality of the provisions were attacked under
section 51(xxxi)
by the owner of the aircraft in question who was not a debtor.
The majority of the High Court of Australia rejected this particular
attack and
held that the statutory liens and their consequences did not constitute an
acquisition of property within section 51(xxxi)
but part of valid regulatory
provisions.
[82]
( In relation to
deprivations not falling within the provisions of section 51(xxxi), the
Australian High Court has developed a principle
of proportionality in order to
determine the circumstances under which it would be permissible for a statute to
dispossess a person
of property without compensation. Although frequently not
mentioned by name, the approach has in substance been a form of proportionality
inquiry. The following passage from the judgment of McHugh J in
Lawler
12
[1]
is illustrative
of the reasoning of the Court:
“[A forfeiture] order . . . is a drastic but incidental measure whose
purpose is to facilitate compliance with those provisions
of the Act which
regulate commercial fishing in Australian waters. When the forfeiture of
property is a reasonably proportional
consequence of a breach of a law passed
under a power conferred by s. 51 of the Constitution, no acquisition of property
for the
purpose of s. 51(xxxi) takes place. The notion of paying fair
compensation to the owner of property which is validly forfeited to
the Crown
for a breach of the law is simply absurd. . . . [T]he question is whether the
forfeiture is reasonably incidental to the
exercise of a power other than s.
51(xxxi). If it is not, the forfeiture is invalid. If it is, s. 51(xxxi) has
no operation.”
McHugh J moreover pertinently held that
–
“[f]orfeiture of foreign vessels involved in illegal fishing in Australian
waters is a reasonably proportional means of achieving
. . . [the section 100]
object [of protecting Australian fishing grounds from exploitation by foreign
fishing vessels without the
consent of the executive government]. Of course, in
determining whether a law is a reasonably proportional means of achieving a
legislative purpose, the Court must take into account the adverse impact of the
law on those affected by the
law.”
12
[2]
[83]
( In
Airservices
Australia
12
[3]
the following
passage from the judgment of Brennan J in
Mutual Pools & Staff Pty Ltd v
The Commonwealth
12
[4]
was
confirmed:
12
[5]
“In my view, a law may contain a valid provision for the acquisition of
property without just terms where such an acquisition
is a necessary or
characteristic feature of the means which the law selects to achieve its
objectives and the means selected are
appropriate and adapted to achieving an
objective within power, not being solely or chiefly the acquisition of property.
But where
the sole or dominant character of a provision is that of a law for the
acquisition of property, it must be supported by s 51(xxxi)
and its validity is
then dependent on the provision of just terms.”
It was
pointed out
12
[6]
that this was in
effect the explanation of decisions that laws providing for the imposition of a
tax, the compulsory payment of provisional
tax, the seizure of the property of
enemy aliens, the sequestration of bankrupts’ property, the forfeiture of
prohibited imports
or the exaction of fines and penalties are not affected by
section 51(xxxi).
Council of Europe
[84] Article 1 of the First
Protocol to the European Human Rights Convention contains a property guarantee
in the following terms:
“[1] Every natural or legal person is entitled to the peaceful enjoyment
of his possessions.
[2] No one shall be deprived of his possessions except in the public interest
and subject to the conditions provided for by law
and by the general principles
of international law.
[3] The preceding provisions shall not, however, in any way impair the right of
a State to enforce such laws as it deems necessary
to control the use of
property in accordance with the general interest or to secure the payment of
taxes or other contributions or
penalties.” (Numbering of sentences
supplied.)
[85] These three sentences have come to be
referred to as the first, second and third “rules”
respectively.
12
[7]
The first rule
has come to be regarded as an institutional property guarantee. The second
rule, despite the use of the word “deprived”
has come to be
identified with the state’s power to expropriate and the third rule with
the state’s police power to regulate,
or as a deprivation clause. Under
the third rule dispossessions without compensation have been held to be lawful
in cases where
heavy property taxes have been
imposed;
12
[8]
exchange control
impositions have been levied;
12
[9]
compulsory contributions to a state pension scheme
levied;
13
[0]
fines imposed for a
criminal offence, and smuggled goods
forfeited;
13
[1]
and property
involved in a criminal act
forfeited.
13
[2]
[86] Under
the Convention a proportionality analysis has been developed in order to
determine whether a deprivation of property is
lawful or not. The regulatory
measure must comply with a municipal law (be lawful), be in the public interest
and establish a fair
balance between the public interest served and the property
interest affected.
13
[3]
As to
what is necessary in the public interest, that is left to the State as they are
seen to be the best judges on this, but still
there must be a purpose. The
states are given a wide margin of appreciation in this
regard.
13
[4]
Germany
[87] The
German Basic Law property clause, Art 14 GG, reads as follows:
“(1) Property and the right of inheritance shall be guaranteed. Their
substance and limits shall be determined by law.
(2) Property entails obligations. Its use should also serve the public
interest.
(3) Expropriation shall only be permissible in the public interest. It may only
be ordered by or pursuant to the law which determines
the nature and extent of
compensation. Compensation shall reflect a fair balance between the public
interest and the interests of
those affected. In case of dispute regarding the
amount of compensation recourse may be had to the ordinary
courts.”
13
[5]
[88] The
Courts distinguish between “provisions defining the contents and
limits” (“Inhalts- und Schrankenbestimmungen”)
of property and
dispossessions, which would classify as (legislative or administrative)
expropriations in terms of Art. 14(3)
GG.
13
[6]
[89] The
distinction between a provision defining the contents and limits and
expropriation has nothing to do with the extent of
its interference with the
property right of the individual; it is based exclusively on criteria that focus
on the aim or purpose
of the dispossession or interference. To qualify as an
expropriation the purpose of the dispossession must be to confiscate the
right
as such; this is not the case where there is the incidental acquisition of
property in the course of pursuing another, though
legitimate,
objective.
13
[7]
[90] Such
an incidental acquisition, even if it amounts to a complete taking of the
property right or object in question, does not
qualify as an expropriation, but
is still regarded as a provision defining the contents and limits in terms of
Art. 14(1) GG. This
is the case, for example, when the state confiscates
generally a certain class of goods in order to pursue another legitimate public
interest, such as the protection of an endangered animal
species.
13
[8]
[91] In
Germany every provision defining the contents and limits of property has to be
justified by a proportionality analysis.
Within this balancing process, the
impact of the regulation on the property owner is an important consideration.
Other concerns
are the importance of the property right both to the owner and to
society, the effort expended and expenditure incurred by the owner
in order to
acquire the right for herself, and whether the owner could legitimately expect
that the particular right in the property
in question would continue
indefinitely without any
modification.
13
[9]
[92] Particularly
the last criterion has led the courts to require that, for certain limiting
measures to be lawful, they have to
be accompanied by some mitigating measure
for the person whose property is subject to the limiting measure to ensure the
protection
of confidence in existing property rights.
[93] Most often,
regulations that limit existing property rights may only do so if transitional
provisions are provided to cushion
the limitation when it takes
effect.
14
[0]
In cases where
regulations impose a severe burden or amount effectively to a complete taking of
the vested property right, the constitution
may even require the payment of
compensation to equalize the effect of the non-expropriatory
regulation.
14
[1]
United
Kingdom
[94] Although not directly in point on the issue of
constitutionally protected property, certain recent judgments in the Court of
Appeal are instructive. The outer limit for substantive judicial review of an
administrative authority on the ground of unreasonableness
is encapsulated in
the so-called “Wednesbury rule”, namely where the authority’s
decision is one which no reasonable
tribunal could have
reached.
14
[2]
It is unnecessary
to enter into the question whether, in English administrative law, lack of
proportionality has been expressly
recognised as part of the Wednesbury rule or
whether it is a separate ground for
review.
14
[3]
[95] More
recently courts have referred expressly to proportionality when reviewing
executive action.
14
[4]
Suffice it
to refer to the decision in
ex parte Smith
in which the Court of Appeal
per Sir Thomas Bingham endorsed the following approach with regard to the review
of administrative discretion
as an accurate distillation of the principles laid
down by the House of Lords:
“The court may not interfere with the exercise of an administrative
discretion on substantive grounds save where the court
is satisfied that the
decision is unreasonable in the sense that it is beyond the range of responses
open to the reasonable decision-maker.
But in judging whether the
decision-maker has exceeded this margin of appreciation the human rights context
is important.
The more substantial the interference with human rights, the
more the court will require by way of justification before it is satisfied
that
the decision is reasonable in the sense outlined
above
”,
14
[5]
(emphasis
supplied)
a formulation that has subsequently been expressly
approved by the Court of Appeal in
Lord Saville’s
case.
14
[6]
[96] In
adopting this test, the Court of Appeal in
Smith
did so with full
appreciation of the need to respect the separation of powers between the
judiciary and the executive, as the following
passage from the judgment
illustrates:
“The greater the policy content of a decision, and the more remote the
subject matter of a decision from ordinary judicial
experience, the more
hesitant the court must necessarily be in holding a decision to be irrational.
That is good law and, like most
good law, common sense. Where decisions of a
policy-laden, esoteric or security-based nature are in issue, even greater
caution
than normal must be shown in applying the test,
but the test itself
is sufficiently flexible to cover all
situations.
”
14
[7]
(Emphasis supplied)
In
Lord Saville’s
case it
was also well appreciated that this test went beyond questions of “mere
rationality”, as the following passage
shows:
“In such cases it is said that the decision is irrational or perverse.
But this description does not do justice to the decision
maker who can be the
most rational of persons. In many of these cases, the true explanation for the
decision being flawed is that
although this cannot be established the
decision-making body has in fact misdirected itself in law. What justification
is needed
to avoid a decision being categorised as irrational by the courts
differs depending on what can be the consequences of the decision.
If a
decision could affect an individual’s safety then obviously there needs to
be a greater justification for taking that
decision than if it does not have
such grave
consequences.”
14
[8]
[97] The
formulation of property rights and their institutional framework differ, often
widely, from legal system to system. Comparative
law cannot, by simplistic
transference, determine the proper approach to our property clause that has its
own context, formulation
and history. Yet the comparative perspective does
demonstrate at least two important principles. The first is that there are
appropriate
circumstances where it is permissible for legislation, in the
broader public interest, to deprive persons of property without payment
of
compensation.
[98] The second is that for the validity of such
deprivation, there must be an appropriate relationship between means and ends,
between
the sacrifice the individual is asked to make and the public purpose
this is intended to serve. It is one that is not limited to
an enquiry into
mere rationality, but is less strict than a full and exacting proportionality
examination. Moreover the requirement
of such an appropriate relationship
between means and ends is viewed as methodologically sound, respectful of the
separation of powers
between judiciary and legislature (in the case of the
United Kingdom between judiciary and executive) and suitably flexible to cover
all situations. It matters not whether one labels such an approach an
“extended rationality” test or a “restricted
proportionality” test. Nor does it matter that the relationship between
means and ends is labelled “a reasonably proportional”
consequence,
or “roughly proportional”, or “appropriate and adapted”
or whether the consequence is called
“reasonable” or “a fair
balance between the public interest served and the property interest
affected”.
[99] That the word “arbitrary” can
grammatically have such a substantive content is reflected in the
Oxford
English Dictionary
definition of “in an arbitrary manner” which
includes “without sufficient reason”. The standard set in section
25(1) is “arbitrary” and not, as in section 36(1) of the
Constitution, “reasonable and justifiable”.
The conclusion
reached on the meaning of arbitrary in section 25
[100] Having regard to
what has gone before, it is concluded that a deprivation of property is
“arbitrary” as meant by
section 25 when the “law”
referred to in section 25(1) does not provide sufficient reason for the
particular deprivation
in question or is procedurally unfair. Sufficient reason
is to be established as follows:
(a) It is to be determined by evaluating the relationship between means
employed, namely the deprivation in question, and ends sought
to be achieved,
namely the purpose of the law in question.
(b) A complexity of relationships has to be considered.
(c) In evaluating the deprivation in question, regard must be had to the
relationship between the purpose for the deprivation and
the person whose
property is affected.
(d) In addition, regard must be had to the relationship between the purpose of
the deprivation and the nature of the property as
well as the extent of the
deprivation in respect of such property.
(e) Generally speaking, where the property in question is ownership of land or a
corporeal moveable, a more compelling purpose will
have to be established in
order for the depriving law to constitute sufficient reason for the deprivation,
than in the case when
the property is something different, and the property
right something less extensive. This judgment is not concerned at all with
incorporeal property.
(f) Generally speaking, when the deprivation in question embraces all the
incidents of ownership, the purpose for the deprivation
will have to be more
compelling than when the deprivation embraces only some incidents of ownership
and those incidents only partially.
(g) Depending on such interplay between variable means and ends, the nature of
the property in question and the extent of its deprivation,
there may be
circumstances when sufficient reason is established by, in effect, no more than
a mere rational relationship between
means and ends; in others this might only
be established by a proportionality evaluation closer to that required by
section 36(1)
of the Constitution.
(h) Whether there is sufficient reason to warrant the deprivation is a matter to
be decided on all the relevant facts of each particular
case, always bearing in
mind that the enquiry is concerned with “arbitrary” in relation to
the deprivation of property
under section
25.
“Arbitrary” deprivation as applied to
section 114 of the Act
[101]
( The present case is
distinguishable from the Australian decisions in
Lawler
and
Airservices Australia,
referred to in paras 78-79 above. In
Lawler,
14
[9]
factors such
as the following were taken into account in holding the forfeiture of the
commercial fishing boat to be valid: the protection
of the fishing grounds of
the nation from foreign exploitation; that this was akin to the protection of
the country from smuggling;
drastic action in protection of the country’s
interests was warranted if not expected; the difficulty of enforcing provisions
against foreign owners; the difficulty of enforcing compliance along the length
of the Australian coastline called for a stern
deterrent;
15
[0]
the likelihood of
the deliberate intrusion of the foreign boat for purposes of fishing into the
declared fishing zone without the
complicity of the owner of the boat being
small; that the liability to forfeiture enlists the innocent owner’s
participation
in ensuring the observance of the law and precludes the future use
of the confiscated vessel in the commission of
crime;
15
[1]
“in weighing the
proportionality of Parliament’s response in this particular field the
utility of deterrent measures
is of paramount
importance”.
15
[2]
[102]
( In
Airservices
Australia
15
[3]
the
considerations that weighed with the Court in upholding the statutory liens can
be gleaned from the following passages in the
judgment:
“Aircraft operators, who may incur liability for charges and penalties,
may have few assets within a particular jurisdiction
at any time except
aircraft, and aircraft may leave the jurisdiction very quickly. . . . [C]harges
in large sums can accumulate in
a short time. The charges are for services
related to the safety of aircraft, and those with a proprietary interest, as
well as
the operators, receive a benefit from those services. They are in some
respect akin to necessaries supplied to a ship. The regulatory
regimes . . .
are likely to be widely known to owners of aircraft . . .
;”
15
[4]
. .
. .
“[the owners knew] that such aircraft would be flown on routes to, from
and within Australia, attracting charges for services
and facilities provided to
all airline operators.
. . . [I]t would have been open to [the owners] to protect themselves (by
contract, insurance, or facilities for auditing and reporting)
against the kind
of result that
ensued.”
15
[5]
.
. . .
“While there is no ‘illegality’ in this case . . . the owners
and lessors of an aircraft, like the owners of the
ship in
Lawler
, cannot
be regarded as third parties who have no rational connection with the
achievement of the purpose sought to be achieved by
the impugned
provision.”
15
[6]
[103] The
Australian High Court judgment in
Burton v
Honan
,
15
[7]
on which reliance
was placed on the Commissioner’s behalf both in the High Court and in this
Court, is likewise distinguishable.
It concerned an imported motor car that was
seized in the hands of a purchaser in good faith as goods forfeited to the Crown
pursuant
to section 229 of the
Customs Act
1901-1950. The person
importing the car had been convicted of the offence of having unlawfully
imported the car and under section
229 this resulted in the car in question
being forfeited to the Crown. In regard to such forfeiture, section 262
provided that it
would have effect as condemnation of the car. The High Court
in effect held that such forfeiture and condemnation did not constitute
an
acquisition under section 51(xxxi) of the Constitution, for which “just
terms” would have been necessary, but a valid
deprivation under the
Customs Act.
In this regard Dixon CJ said the
following:
15
[8]
“It is nothing but forfeiture imposed on all persons in derogation of any
rights such persons might otherwise have in relation
to the goods, a forfeiture
imposed as part of the incidental powers for the purposes of vindicating the
Customs laws. It has no
more to do with the acquisition of property for a
purpose in respect of which the Parliament has power to make laws within s. 51
(xxxi.) than has the imposition of taxation itself, or the forfeiture of goods
in the hands of the actual offender.”
[104] Dealing
with an argument relating to the inequity of the forfeiture in relation to the
purchaser in good faith, Dixon CJ said
the following:
“In the administration of the judicial power in relation to the
Constitution there are points at which matters of degree seem
sometimes to bring
forth arguments in relation to justice, fairness, morality and propriety, but
those are not matters for the judiciary
to decide upon. The reason why this
appears to be so is simply because a reasonable connection between the law which
is challenged
and the subject of the power under which the legislature purported
to enact it must be shown before the law can be sustained under
the incidental
power.”
15
[9]
What
appears to have constituted the “reasonable connection” in that case
was that –
“ . . . the history of English and Australian Customs legislation
forfeiture provisions are common, drastic and far-reaching,
and that they have
been considered a necessary measure to vindicate the right of the Crown and to
ensure the strict and complete
observance of the Customs laws, which are
notoriously difficult of complete enforcement in the absence of strong
provisions supporting
their
administration.”
16
[0]
[105] In
the present case we are not dealing with the forfeiture of property in the hands
of those who have committed offences or
assisted in the commission of offences,
whether customs or other offences, nor with imported property that has been
declared forfeited.
In the present case we are also not concerned with property
that has been unlawfully smuggled into the country or in respect whereof
an
offence has been committed in the course of importation, nor where imported
property is for such or any other similar reason subject
to forfeiture in the
hands of third parties. It deals exclusively with the recovery of a customs
debt.
[106]
( The
Gasus
16
[1]
case, which was
relied upon by the High Court and featured prominently in the
Commissioner’s argument before this Court, is
also distinguishable. That
case concerned section 16(3) of an 1845 Netherlands Act. The Netherlands tax
authorities could, like
other creditors, recover unpaid tax debts against all
the tax debtor’s seizable assets. Section 16(3) empowered them to seize
and recover against all movable property found on the tax debtor’s
premises which qualified as “furnishings”, irrespective
of whether
or not these goods belonged to the tax debtor. Gasus had sold and delivered a
concrete mixer to the tax debtor in question,
but it had been a condition of the
sale that Gasus would retain ownership thereof until all amounts due had been
paid. Under the
provisions of section 16(3) the Netherlands tax authorities
seized the concrete mixer on the debtor’s premises. Under section
16(3)
the concrete mixer, on the facts, qualified as a “furnishing”. The
European Court, by six votes to three, concluded
that there had been no
violation of Article 1 of Protocol
1.
16
[2]
[107] In
its judgment, the majority –
(a) examined the complaint under the head of “securing the payment of
taxes” under the “third rule” of Article
1
16
[3]
and clearly accorded the
Netherlands a margin of appreciation in relation to the ambit of section
16(3).
16
[4]
This Court has held
that, because of such margin of appreciation – which operates in the
international sphere and is not to
be confused with the appropriate deference a
court ought to pay to a domestic legislature – judgments of the European
Court
of Human Rights must be considered with particular caution when it has
decided that there has been no infringement of the
Convention.
16
[5]
(b) regarded Gasus’ right of ownership to be something different from
“true” or “ordinary” property
rights and considered it
–
“apparent that whoever sells goods subject to retention of title is not
interested so much in maintaining the link of ownership
with the goods
themselves as in receiving the purchase price. A state may therefore
legitimately, within its margin of appreciation,
differentiate between retention
of title and other forms of
ownership.”
16
[6]
It
has already been indicated, in paras 54-56 above, why such a proposition, if
applied to South African law, rests on an incorrect
analysis and cannot be
accepted.
(c) considered it to be relevant that –
“. . . the owners of goods subject to seizure under section 16(3) of the
1845 Act had knowingly allowed them to serve as
‘furnishings’ of the
tax debtor’s premises. They might therefore well be held responsible to
some extent for enabling
the tax debtor to present a semblance of
creditworthiness.”
16
[7]
The
motor vehicles in the present case did not serve as “furnishings”
and there is no evidence to suggest that FNB, by
placing the respective customs
debtors in possession thereof, induced any belief in the Commissioner which
could in any way have
been to the latter’s detriment, either at the time
of the debtors importing the goods in respect whereof they owe the duty
or
subsequently. For these reasons, the
Gasus
case is also distinguishable
from the present and, in any event, one is constrained to disagree with the
conclusions reached if they
are sought to be applied under the South African
Constitution.
[108] Here the end sought to be achieved by the
deprivation is to exact payment of a customs debt. This is a legitimate and
important
legislative purpose, essential for the financial well-being of the
country and in the interest of all its inhabitants. Section 114,
however, casts
the net far too wide. The means it uses sanctions the total deprivation of a
person’s property under circumstances
where (a) such
person
has no
connection with the
transaction
giving rise to the customs debt; (b)
where such
property
also has no connection with the
customs debt
;
and (c) where such person has not transacted with or placed the customs debtor
in possession of the property under circumstances
that have induced the
Commissioner to act to her detriment in relation to the incurring of the customs
debt.
[109] In the absence of any such relevant nexus, no sufficient
reason exists for section 114 to deprive persons other than the customs
debtor
of their goods. Such deprivation is accordingly arbitrary for purpose of
section 25(1) and consequently a limitation (infringement)
of such
persons’ rights.
Justification
[110] It might be
contended that once the deprivation has been adjudged to be arbitrary, no scope
remains for justification under
section 36. By its terms, section 36 of the
Constitution draws no distinction between any rights in the Bill of Rights when
it provides
that “[t]he rights in the Bill of Rights may be
limited”.
16
[8]
Neither the
text nor purpose of section 36 suggests that any right in the Bill of Rights is
excluded from limitation under its provisions.
In view of the conclusion
ultimately reached on this part of the case, it is not necessary to decide this
question finally here.
It will be assumed, without deciding, that an
infringement of section 25(1) of the Constitution is subject to the provisions
of
section 36.
[111]
( It is unnecessary, on
the facts of the present case, to embark in any detail on the section 36(1)
justification analysis, incorporating
that of proportionality applied to the
balancing of different interests, as enunciated in
S v Makwanyane and
Another
16
[9]
and as adapted
for the 1996 Constitution in
National Coalition for Gay and Lesbian Equality
and Another v The Minister of Justice and
Others
.
17
[0]
FNB’s
ownership in the vehicles concerned is ultimately completely extinguished by the
operation of section 114 of the Act.
As against this the Commissioner gains an
execution object for someone else’s customs debt. But, as already
indicated, there
is no connection between FNB or its vehicles and the customs
debt in question. Under these circumstances the object achieved by
section 114
is grossly disproportional to the infringement of FNB’s property
rights.
[112] The amount of money recovered by
the Commissioner in the past on the sale of goods belonging to persons other
than customs
debtors can play little if any role in the justification enquiry in
the present case. In the present case Conradie J’s unchallenged
finding
was that the amount so recovered was “next to
nothing”.
17
[1]
But even if
the amount were substantial, it would not necessarily follow that, by itself,
this would constitute justification.
One would still have to weigh up the
nature and extent of the limitation in question and decide whether such
limitation was reasonable
and justifiable merely by virtue of the fact that a
substantial financial advantage accrued to the state as a direct consequence
of
the limitation. It is unnecessary, in the circumstances of the present case, to
pursue such an enquiry any further. For the
same reason the judge’s
following comment is not germane to the justification enquiry in the present
case:
“The coercive effect on a shipping agent of having its customers’
goods attached as security for duty which it owes must
be considerable. I am
not prepared to say that the Revenue should get along without the use such
invasive
measures.”
17
[2]
Coercion
by the state premised on the infringement of persons’ constitutional
rights cannot serve to justify the infringement
in the present case, where the
benefit to the state is so minimal. It is unnecessary to decide whether, if the
coercive effect were
greater, this would be relevant to the justification
enquiry.
[113] No other fact or consideration has been urged, or comes
to mind, that might be relevant in applying section 36(1). Under the
circumstances the conclusion is unavoidable that the infringement by section 114
of section 25(1) is not reasonable and justifiable
in an open and democratic
society based on human dignity, equality and freedom. The provision is
accordingly constitutionally invalid.
The appropriate
relief
:
[114] On the basis of the above conclusion regarding FNB’s
property attack, it is impossible textually to sever the good from
the bad in
section 114 of the Act without embarking on an extensive redrafting of the
section, an action which would impermissibly
trespass on the terrain of the
legislature and be inappropriate in the present case. Considering only the
successful property attack,
the appropriate remedy would be an order declaring
the provisions of section 114 to be constitutionally invalid to the extent that
they provide that the goods of persons other than the customs debtor referred to
in the section are subject to a lien, detention
and sale; an order analogous to
the order made in
Ferreira v
Levin
.
17
[3]
I would stress
that, because of the expansive wording of section 114 and for the reasons
mentioned, it is not possible to tailor
a narrower order of constitutional
invalidity. This must not be taken to imply that there may not be circumstances
when the nexus
between the third party and the customs debtor, or that between
the goods of the third party and the customs debtor or that between
the goods of
the third party and the customs debt is such that the detention and sale of such
goods would pass constitutional muster.
There may well be such situations and
it may be possible to craft a statutory provision which would limit the
detention and sale
of the goods of third parties to such circumstances. But
that is a task for the legislature and not for this Court.
[115] The
remedy referred to above in respect of the successful property challenge affords
FNB all the relief sought by it in these
proceedings. Even if FNB were to
succeed on its access to court challenge, no additional substantive relief could
be granted to
it. Under these circumstances it is unnecessary to consider this
constitutional challenge of FNB. This conclusion notwithstanding,
anxious
consideration has been given by the Court to the question whether it might not
be in the public interest to decide this issue,
inasmuch as it was raised in the
High Court.
The section 34 access to court challenge
[116] In
the process of considering such possibility, it eventually became apparent that
the provisions of the Act in relation to
this issue were even more complex than
they appeared at the conclusion of argument. On material matters in this regard
the Court
has not had the benefit of any, or sufficiently comprehensive
argument. Under these circumstances it would be inadvisable to decide
the
issue.
[117] There are substantial doubts as to whether the procedural
provisions of section 114 are consistent with section 34 of the Constitution
in
the light of the
Lesapo
judgment
17
[4]
because, as pointed
out in para 20 above, the Commissioner is able to take possession of and sell
the goods referred to in section
114 without having to invoke court process
beforehand. In
Lesapo
the Court declared section 38(2) of the North West
Agricultural Bank Act 14 of 1981 to be constitutionally invalid because the
relevant
provisions provided that the bank could proceed in various ways against
its debtors “without recourse to a court of law”
and because the
debtor enjoyed none of the statutory or other safeguards applicable to the
attachment and sale in execution of a
judgment
debt.
17
[5]
[118]
( By contrast, in
Metcash,
17
[6]
this Court
declined to uphold a similar attack in respect of sections 36(1), 40(2)(a) and
40(5) of the Value-Added Tax Act 89 of
1991 (the VAT Act). The crucial
distinguishing feature in
Metcash
was section 40(2)(a) of the VAT Act
which provides that the Commissioner may, in respect of tax due, file with the
clerk or Registrar
of any competent court, a statement certified by him
regarding such tax due and such statement thereupon has all the effects of,
and
any proceedings may be taken thereon as if it were, “ a civil judgment
given in that court”. The consequence hereof
is
that:
“[i]n contradistinction to the self-initiated, self-driven and
self-supervised mechanism involved in
Lesapo
and the two cases following
it, the execution process created by section 40(2)(a) of the [VAT] Act
specifically goes via the ordinary
judicial institutions. It requires the
intervention of court officials and procedures. The subsection, by saying that
once the
Commissioner’s statement has been filed it has ‘all the
effects . . . of a civil judgment’, quite unequivocally
includes by
reference the whole body of legal rules relating to execution. Filing the
statement sets in train the ordinary execution
processes of the particular
court.”
17
[7]
Any
doubt as to the validity of section 114 on the grounds of its inconsistency with
section 34 of the Constitution would be removed
by an amendment of the present
Act to incorporate a provision corresponding to that of section 40(2)(a) of the
VAT Act.
The other challenge
[119] Inasmuch as the property
attack has been successful, it is unnecessary to decide on the correctness or
otherwise of FNB’s
freedom of economic activity and trade challenge either
under section 26 of the interim Constitution or under section 22 of the 1996
Constitution. FNB did not contend that a successful challenge under these
sections would lead to a more extensive striking down
of section 114 than
achieved under the property challenge.
Disposal of the appeal in the
Lauray-Airpark case, Cape of Good Hope High Court case no.
825/99
[120] The appeal must succeed on the basis of the property
challenge, and section 114 of the Act must be declared to be inconsistent
with
the Constitution to the extent that it provides that the goods of persons other
than the customs debtor envisaged in the section
are subject to a lien,
detention and sale.
[121] It is necessary to consider whether, under
section 172(1)(b)
17
[8]
of the
Constitution, it would be just and equitable to limit the retrospective effect
of the declaration of invalidity or to suspend
it, or to do both. As far as the
former is concerned the principal factors relating to the retrospectivity of
such an order were
stated by O’Regan J in the
Bhulwana
case:
17
[9]
“Central to a consideration of the interests of justice in a particular
case is that successful litigants should obtain the
relief they seek. It is
only when the interests of good government outweigh the interests of the
individual litigants that the Court
will not grant relief to successful
litigants. In principle too, the litigants before the Court should not be
singled out for the
grant of relief, but relief should be afforded to all people
who are in the same situation as the litigants. . . . On the other hand,
as we
stated in
S v Zuma
(at 43), we should be circumspect in exercising our
powers under section 98(6)(a) so as to avoid unnecessary dislocation and
uncertainty
in the criminal justice process. As Harlan J stated in
Mackey v
US
[1971] USSC 61
;
401 US 667
(1971) at 691:
‘No one, not criminal defendants, not the judicial system, not society as
a whole is benefited by a judgment providing a man
shall tentatively go to jail
today, but tomorrow and every day thereafter his continued incarceration shall
be subject to fresh litigation
on issues already
resolved.’
As a general principle, therefore, an order of invalidity should have no effect
on cases which have been finalised prior to the date
of the order of
invalidity.” (Certain authorities
omitted.)
[122] These principles, although stated in
relation to the interim Constitution and in respect of criminal matters, are
equally applicable
to the “just and equitable” enquiry under section
172(1)(b) of the
Constitution,
18
[0]
and to civil
matters. It would not be just and equitable to prejudice persons who have in
good faith purchased goods pursuant to
the selling provisions of section 114 of
the Act and have been placed in possession of such goods pursuant to such sales.
It would
also be disruptive, burdensome and difficult to reverse the
consequences of such sales if they were to be invalidated. The same
consideration would apply to court cases under section 114 that have been
finalised. It would therefore be just and equitable to
limit the retrospective
operation of the order to exclude such sales and also finalised cases from its
operation.
[123] There is no good reason for suspending the order of
constitutional invalidity in consequence of the property challenge. The
invalidity relates only to goods owned by persons who are not customs debtors as
envisaged by section 114. Such goods represent
no more than a minute proportion
of goods annually attached and its effect on the fiscus is negligible. By
contrast it would be
wholly disproportionate to require any individual owner of
goods, not being a customs debtor as envisaged by section 114, to have
to forego
her constitutional rights and suffer the loss of ownership of such goods, even
for a limited period of time. Parliament
remains free to amend or restructure
section 114 of the Act, and any related provisions, in response to the judgment
and order in
this matter, provided it does so in a manner that is consistent
with the Constitution.
[124] As far as the costs of appeal are concerned
no good reason exists why the appellant should not be awarded its costs, in view
of the fact that it has achieved substantial success in the result. Likewise it
is entitled to its costs in the High Court, with
the exception of the costs of
the postponed hearing on 22 February 2000. This postponement was necessitated
by a belated application
by FNB to amend its notice of motion in order to
introduce the contention that section 114 of the Act violated the right to
access
to court of customs debtors. FNB was ordered to pay these costs,
regardless of the outcome on the merits, because the High Court
was of the view
that the notice of amendment was given too late, in view of the complexities of
the matter. No good grounds exist
for interfering with this costs
order.
Disposal of the appeal in the Republic Shoes case, Cape of Good
Hope High Court case no. 9101/94
[125] As indicated in paragraph 3 of
this judgment the Cape High Court correctly granted no substantive relief to FNB
in this matter.
FNB’s counsel in this case (who also appeared in this
Court on its behalf in the Republic Shoes case) contended in the High
Court,
however, that if FNB was successful in the Lauray-Airpark case it should not be
ordered to pay all the costs in the Republic
Shoes case, because a great deal of
the research done in the latter case was utilised in the former. Inasmuch as no
relief was granted
to FNB in the Lauray-Airpark case either, the High Court
correctly found it unnecessary to consider this
contention.
18
[1]
[126] The
present limited appeal in the Republic Shoes matter on the question of costs was
premised on the fact that FNB would achieve
substantial success on appeal in the
Lauray-Airpark case. FNB has achieved such success and it accordingly becomes
necessary to
consider the argument on the costs to be awarded in the High Court.
It must be borne in mind that in as much as it was unnecessary
for the High
Court to consider what an appropriate costs order would have been in the
Republic Shoes matter if FNB had been successful
before it in the Lauray-Airpark
matter, this Court, if it decided to deal with it, would be at large on the
question of such costs.
[127] It was contended on appeal that in the
event of FNB achieving substantial success on appeal in the Lauray-Airpark
matter, the
question of the High Court costs should be remitted to the High
Court for consideration. In the alternative, it was submitted that
this Court
could consider the matter as being an issue connected with a decision on a
constitutional matter for purposes of section
167(3)(b)
18
[2]
and should order
that –
(a) the respondent should pay FNB’s costs arising from research into and
consideration of the comparative international situation,
as though the costs
had been incurred in the Lauray-Airpark matter;
alternatively,
(b) any costs order in respondent’s favour should exclude costs arising
from research into and consideration of the comparative
international
situation.
[128] If this Court has the power under section
167(3)(b) of the Constitution to consider this issue on costs then it should do
so.
It is in as good a position as the High Court to consider the matter. This
was in fact the view of the High Court in granting a
positive certificate to FNB
under Constitutional Court Rule 18(6). There is, moreover, no justification for
incurring further costs
that a referral back to the High Court would entail,
merely to determine liability for costs already incurred.
[129] In
essence the argument advanced on FNB’s behalf is that certain costs
incurred in the Republic Shoes case ought to be
treated as though they were
incurred in the Lauray-Airpark case. This would in effect require a
consideration of the interrelationship
between the two cases and the costs
incurred in the latter case. This is an issue connected with a decision on a
constitutional
matter, namely the unconstitutionality of section 114 of the Act,
which in turn entitles FNB to its costs in the Lauray-Airpark case,
and this
Court ought to consider it.
[130] The argument in support of the costs
relief contended for was twofold. In the first place it was contended that the
timing
of the
in limine
point, namely that FNB had no cause of action
under the interim Constitution, was important. Had the respondent raised it at
an
earlier stage FNB would not have persisted with the Republic Shoes matter.
There is no merit in this submission. There is no suggestion
that the
respondent acted in bad faith and deliberately withheld raising the absence of a
constitutional cause of action in order
to increase the costs at FNB’s
expense. Moreover, the fact that the respondent did not grasp or raise the
point earlier, affords
no excuse for FNB not being aware of it
sooner.
[131] Secondly it was argued that the international comparative
research had, in any event, to be done for the Lauray-Airpark matter,
had to be
done only once, and was not wasted. Because FNB enjoyed the benefit in this
case of the research done in the Republic
Shoes case, it should, at the very
least, not have to bear those costs in the latter case. This contention cannot
be acceded to.
It is nothing more than a collegial wind-fall for counsel or
legal representatives in case X to benefit from research done by legal
representatives in case Y. The issues in the Lauray-Airpark case are complex
and difficult, as both this and the High Court judgment
demonstrate. The case
amply warranted the employment of two counsel on FNB’s behalf. Two
counsel were not employed. Instead
separate single counsel were employed for
each case. This the litigant is fully entitled to do, but must live with the
consequences
of its decision. No sound principle of law, fairness or logic
suggest itself why work done and money expended by an applicant in
one case, in
which the applicant achieves no success, can be treated as though it were work
done in a separate case, simply because
the applicant’s legal
representatives in the latter case have fortuitously benefited from
it.
The Order
[132] It is convenient at this stage to quote
the actual order made by the High Court so that the impact of our order on that
of
the High Court can be clearly appreciated. In the High Court both cases were
dealt with in one order.
“(1) The detention of a Volkswagen Jetta motor vehicle in the possession
of Lauray Manufacturers CC belonging to the applicant
and the detention of
Mercedes-Benz and Volkswagen Golf motor vehicles in the possession of Airpark
Halaal Cold Storage CC belonging
to the applicant was not unlawful.
(2) The applicant is to pay –
(a) the costs of this application;
(b) the costs of the postponed hearing on 22 February 2000;
and
(c) the costs of
First National Bank Limited v The Minister of Finance
(Case no
9101/94),
18
[3]
all such costs to include the costs of two
counsel.”
18
[4]
[133] The
following orders are accordingly made:
A: In the Cape of Good Hope
High Court case
First National Bank of SA Limited v The Minister of Finance
(Case no 9101/94):
The appeal is dismissed with costs and the appellant is ordered to pay the costs
in the High Court.
B: In the Cape of Good Hope High Court
case
First National Bank of SA Limited v The Commissioner for the South
African Revenue Services and the Minister of Finance
(Case no. 825/99):
1. The appeal succeeds with costs.
2. The provisions of section 114 of the Customs and Excise Act 91 of 1964 are
declared to be constitutionally invalid to the extent
that they provide that
goods owned by persons, other than the person liable to the State for the debts
described in the section,
are subject to a lien, detention and sale.
3. The order in paragraph 2 shall not apply
–
3.1 to sales of goods to purchasers, resulting from the application of the
provisions of section 114, where such purchasers have
been placed in possession
of such goods pursuant to such sales; or,
3.2 to any case in which judgment has been given and in which, as at the date of
this order, neither an appeal nor a review is pending
or the time for the noting
of an appeal has
expired.
4. The High Court order is set aside and replaced with the following:
“1. The detentions of a Volkswagen Jetta motor vehicle in the
possession of Lauray Manufacturers CC belonging to the applicant
and of
Mercedes-Benz and Volkswagen Golf motor vehicles in the possession of Airpark
Halaal Cold Storage CC belonging to the applicant
were unlawful.
2. The applicant is to pay the costs of the postponed hearing on 22 February
2000, such costs to include the costs of two counsel.
3. Save for the costs referred to in paragraph 2, the respondents are to pay
the costs of the application in the case of
First National Bank of SA Limited
v The Commissioner for the South African Revenue Services and The Minister of
Finance
(Case no
825/99).”
Chaskalson CJ, Langa
DCJ, Kriegler J, Madala J, Mokgoro J, O’Regan J, Sachs J, Yacoob J, Du
Plessis AJ, Skweyiya AJ concur in
the judgment of Ackermann J.
For the appellant: AM Breitenbach and N Bawa instructed by
Cape High Court Case Number 825/99 Field & Gowar Inc, Cape
Town.
For the appellant: SC Kirk-Cohen instructed by Field & Gowar
Cape High Court Case Number 9101/94 Inc, Cape Town.
For the respondents: GJ Marcus SC, JP Vorster SC and CS Kahanovitz
instructed by the State Attorney, Cape Town.
[1]
Reported as
First National
Bank of SA Ltd t/a Wesbank v Commissioner for the South African Revenue Service
and Another
2001 (7) BCLR 715
(C);
2001 (3) SA 310
(C). References in this
judgment will be to the South African Law Reports.
[2]
Its provisions are quoted in
para 11 below.
[3]
[1996] ZACC 13
;
1996 (7) BCLR 889
(CC);
1996
(4) SA 552
(CC).
[4]
The Constitution of the
Republic of South Africa 1996.
[5]
Its long title.
[6]
Section 22 of the interim
Constitution and section 34 of the (1996) Constitution, quoted in paragraph 116
below.
[7]
Section 28 of the interim
Constitution and section 25 of the (1996) Constitution, quoted in paragraph 25
below.
[8]
Section 26 of the interim
Constitution, quoted in n 104 below and section 22 of the (1996)
Constitution.
[9]
The High Court found (above n 1
at 314I) that Lauray owed R3,26m to the Commissioner by 10 June 1996, but this
should probably read
10 January 1996.
1
[0]
The
South African Revenue
Service Act 34 of 1997
substituted the word “Commissioner” for
“Office” wherever it occurred in subsection (1), and for convenience
and clarity “Commissioner” will be used throughout the judgment.
[1]
1
Section 114(1)(a)(i).
1
[2]
Section 114(1)(a)(ii).
1
[3]
Sections 10
and
44
(1).
1
[4]
Section 47(1).
1
[5]
Sections 38(1)
and
39
(1).
1
[6]
Sections 65
to
74A
.
1
[7]
In this respect reference
may be made to the list compiled in 5-32 to 5-34 of HC Cronje
Customs and
Excise Service
(Butterworths)
(Issue 5).
1
[8]
Section 44(3)
-(5).
1
[9]
Section 44(5A)
-(6).
2
[0]
Section 44(6)(c).
2
[1]
Definition of
“importer” in
section 1.
[2]
2
See Cronje above n 17 at
Int-24.
2
[3]
Id.
2
[4]
Sections 47(9)
,
65
(4)-(6)
and
69
(3) read with
part 2B
of schedule 1, respectively.
2
[5]
See
sections 47(9)(b)
and
(e),
65
(4)(a) and (c), and
69
(3).
2
[6]
Sections 47(9)(f)
and
65
(6)(b).
2
[7]
See
,
for example
,
Commissioner for Inland Revenue v NCR Corporation of South Africa (Pty) Ltd
1988 (2) SA 765
(A) at 774D-F;
Metcash Trading Limited v The
Commissioner for the South African Revenue Service and Another
2001 (1) BCLR
1
(CC);
2001 (1) SA 1109
(CC) paras 35-36;
McKesson Corporation v Division of
Alcoholic Beverages and Tobacco, Department of Business Regulation of
Florida
496 US 18
(1990);
Phillips v Commissioner of Internal Revenue
[1931] USSC 146
;
283 US 589
(1930).
2
[8]
For an example of its
operation see
Commissioner for Customs and Excise v Standard General
Insurance Co Ltd
[2000] ZASCA 138
;
2001 (1) SA 978
(SCA).
2
[9]
See sections 78(2) and (3),
79, 80(1), 82, 83, 84(1), 85 and 86.
3
[0]
See sections 81, 83, 84, 85
and 86.
3
[1]
Section 88(2)(a)(i).
3
[2]
Secretary for Customs and
Excise v Millman NO
1975 (3) SA 544
(A) at 550A-B;
Rand Bank Limited v
Government of the Republic of South Africa
1975 (3) SA 726
(A) at 731D-732E;
Minister of Finance and others v Ramos
1998 (4) SA 1096
(C) at
1100F-G.
[3]
3
Wille’s Principles
of South African Law
8 ed by Hutchison, Van Heerden, Visser and Van der
Merwe, Juta: Kenwyn, 1991 at 262-4;
Groenewald v Van der Merwe
1917 AD
233
at 238-9.
3
[4]
S v Brick
1973 (2) SA
571
(A) at 579H and
S v Adams
1986 (4) SA 882
(A) at 891D-E.
3
[5]
S v Adams
id at
890H-J.
3
[6]
Id at 891A.
3
[7]
S v Brick
above n 34
at 579H.
3
[8]
Which in its
relevant part provides:
“Anyone listed in this section has the right to approach a competent
court, alleging that a right in the Bill of Rights has
been infringed or
threatened, and the court may grant appropriate relief . . .
”
3
[9]
Quoted
in n 38 above.
4
[0]
Section 28 of
the Interim Constitution provided:
“28. Property
(1) Every person shall have the right to acquire and hold rights in property
and, to the extent that the nature of the rights permits,
to dispose of such
rights.
(2) No deprivation of any rights in property shall be permitted otherwise than
in accordance with a law.
(3) Where any rights in property are expropriated pursuant to a law referred to
in subsection (2), such expropriation shall be permissible
for public purposes
only and shall be subject to the payment of agreed compensation or, failing
agreement, to the payment of such
compensation and within such period as may be
determined by a court of law as just and equitable, taking into account all
relevant
factors, including, in the case of the determination of compensation,
the use to which the property is being put, the history of
its acquisition, its
market value, the value of the investments in it by those affected and the
interests of those
affected.”
4
[1]
Above
n 1 at 327C.
4
[2]
Id 327D-E.
4
[3]
Id 328B-C.
[4]
4
Id 328E.
4
[5]
Id 328F.
4
[6]
Id 328G-H.
4
[7]
Id 328F-G.
4
[8]
Id 316I-J and 329A-B.
4
[9]
Id 329A-B.
5
[0]
Id 329J.
5
[1]
Id 330A.
5
[2]
Id 330F-G.
5
[3]
Id 330 F-G.
5
[4]
Compare id 330C-D.
[5]
5
Id 332A-C.
5
[6]
Id 334D.
5
[7]
Id 330F-G.
5
[8]
Id 335B.
5
[9]
Id 335B-C.
6
[0]
Id 335C. See also
Millman NO
and the other cases cited in n 32
above.
6
[1]
The corresponding
provision of the Interim Constitution (IC) (Act 200 of 1993), section 35(3),
provided:
“In the interpretation of any law and the application and development of
the common law or customary law, a court shall have
due regard to the spirit,
purport and objects of this
Chapter.”
In
Carmichele v Minister of Safety and Security and Another
,
[2001] ZACC 22
;
2001 (10)
BCLR 995
(CC);
2001 (4) SA 938
(CC) it was held, at para 33 fn 17, that –
“[a]s emerges from the provisions of section 35(3) of the IC and section
39(2) of the Constitution, the development of the
common law will not be
different whether we ‘have regard to’ or ‘promote’ the
‘spirit, purport and
objects’ of the respective Bills of
Rights.”
6
[2]
Above
n 61 at para 39.
6
[3]
1996 (4) SA 19
(A) at
26J-27A. See also
Bombay Properties (Pty) Ltd v Ferrox Construction
1996
(2) SA 853
(W) at 856C and Joubert & Faris (ed)
Law of South Africa
(First Reissue) Vol 15:
Lien
by Susan Scott, para 50.
6
[4]
1999 (Butterworths) 78 para
(e).
6
[5]
Id.
[6]
6
Millman NO
above n 32
at 548H.
6
[7]
Id.
6
[8]
Coetzee v Government of
the Republic of South Africa and Others; Matiso v The Commanding Officer, Port
Elizabeth Prison and Others
,
[1995] ZACC 7
;
1995 (10) BCLR 1382
(CC);
1995 (4) SA 631
(CC)
paras 13 and 17;
Case and Another v Minister of Safety and Security and
others; Curtis v Minister of Safety and Security and Others
[1996] ZACC 7
;
1996 (5) BCLR
609
(CC);
1996 (3) SA 617
(CC) paras 93 and 97; and
Mistry v Interim National
Medical and Dental Council and Others
[1998] ZACC 10
;
1998 (7) BCLR 880
(CC);
1998 (4) SA
1127
(CC) paras 21, 25 and 27.
6
[9]
De Lange v Smuts NO and
Others
[1998] ZACC 6
;
1998 (7) BCLR 779
(CC);
1998 (3) SA 785
(CC) para 85;
Investigating Directorate: Serious Economic Offences v Hyundai Motor
Distributors (Pty) Ltd
[2000] ZACC 12
;
2000 (10) BCLR 1079
(CC);
2001 (1) SA 545
(CC) paras
22-24.
7
[0]
Ex Parte Chairperson of
the Constitutional Assembly: In Re Certification of the Constitution of the
Republic of South Africa
1996
1996 (10) BCLR 1253
(CC);
1996 (4) SA 744
(CC).
7
[1]
Id para 57.
7
[2]
Investigating
Directorate: Serious Economic Offences v Hyundai Motor Distributors (Pty)
Ltd
2000 (10) BCLR 1079
(CC); 2001 (1) (SA) 545 (CC).
7
[3]
Id para 18.
7
[4]
Id.
7
[5]
The Law of South
Africa
Vol 4 Part 1 (First Reissue) paras 18, 21-23.
7
[6]
Id, para 23.
[7]
7
Hyundai
above n 72
para 18.
7
[8]
Even a cursory reading of
the works cited in n 79 below illustrates this. See also Kleyn, below n 79, at
404.
7
[9]
Particular mention must
be made of the seminal works of Carole Lewis “The Right to Private
Property in a New Political Dispensation
in South Africa” in
(1992) 8
SAJHR
389
(“Lewis 1992”) and AJ van der Walt,
The
Constitutional Property Clause
Juta: Kenwyn, 1997 (Van der Walt 1997) and
Constitutional Property Clauses: A Comparative Analysis
Juta: Kenwyn,
1999 (Van der Walt 1999). Other significant contributions by South African
scholars in this field include Budlender
“The Constitutional Protection of
Property Rights: Overview and commentary” in Geoff Budlender et al,
Juta’s New Land Law,
Juta: Kenwyn, 1998 (“Budlender”);
Matthew Chaskalson “The Problem with Property: Thoughts on the
Constitutional
Protection of Property in the United States and the
Commonwealth”
(1993) 9
SAJHR
388
(“Chaskalson 1993);
“The Property Clause: Section 28 of the Constitution”
(1994) 10
SAJHR
131
(“Chaskalson 1994”); “Stumbling towards
Section 28: Negotiations over the Protection of Property Rights in the
Interim
Constitution”
(1995) 11
SAJHR
222
(“Chaskalson 1995”);
Matthew Chaskalson and Carole Lewis “Property” in Chaskalson et al
Constitutional Law of South Africa
Juta: Kenwyn, 1998, chapter 31
(“Chaskalson and Lewis”); De Koker and Pretorius “Confiscation
Orders in terms of
the Proceeds of Crime Act: some constitutional
perspectives”
(1998)
TSAR
39
, 277, 467 (“De Koker and
Pretorius”); Johan de Waal et al
The Bill of Rights Handbook
4ed,
Juta: Kenwyn, 2001, chapter 25 (“De Waal et al”); Kleyn “The
constitutional protection of property: a comparison
between the German and the
South African approach” (1996) 11
SAPL
402 (“Kleyn”);
Murphy “Property Rights and Judicial Restraint: A Reply to
Chaskalson”
(1994) 10
SAJHR
385
(“Murphy 1994”),
“Interpreting the property clause in the Constitution Act of 1993”
(1995) 10
SAPL
107 (“Murphy 1995”); Roux
“Constitutional Property Rights Review in Southern Africa: the Record of
the Zimbabwe
Supreme Court” (1996) 8
Afr J Int & Comp L
755
(“Roux”); Van der Walt, AJ and Botha, H “Coming to grips with
the new constitutional order: critical comments
on
Harksen v Lane
NO
” (1998) 13
SAPL
17 (“Van der Walt and Botha”);
Erasmus
“Reconciling land reform and the constitutional protection of
property: A look at jurisdictions without an official land reform
programme” (2000) 15
SAPL
105 (“Erasmus”).
8
[0]
Above n 70
paras
70-71.
8
[1]
Id para
72.
8
[2]
“(4) For the
purposes of this section—
(a) the public interest includes the nation’s commitment to land reform,
and to reforms to bring about equitable access to
all South Africa’s
natural resources; and
(b) property is not limited to
land.
(5) The state must take reasonable legislative and other measures, within its
available resources, to foster conditions which enable
citizens to gain access
to land on an equitable basis.
(6) A person or community whose tenure of land is legally insecure as a result
of past racially discriminatory laws or practices
is entitled, to the extent
provided by an Act of Parliament, either to tenure which is legally secure or to
comparable redress.
(7) A person or community dispossessed of property after 19 June 1913 as a
result of past racially discriminatory laws or practices
is entitled, to the
extent provided by an Act of Parliament, either to restitution of that property
or to equitable redress.
(8) No provision of this section may impede the state from taking legislative
and other measures to achieve land, water and related
reform, in order to
redress the results of past racial discrimination, provided that any departure
from the provisions of this section
is in accordance with the provisions of
section 36 (1).
(9) Parliament must enact the legislation referred to in subsection
(6).”
8
[3]
See,
for example, sections 24 (in regard to the environment), 26 (housing), 27
(health care, food, water and social security) and
29 (education).
8
[4]
Above n 79 at 15-16.
8
[5]
Id at 16.
8
[6]
Whatever disagreement there
may be as to the outer limits of the meaning of “property” the
writers accept that ownership
of fixed property and movable corporeals must be
included. Most do so implicitly while some do so explicitly such as, for
example,
De Waal et al above n 79 at 412-414; Lewis (1992) above n 79 at
397-399; Van der Walt (1999) above n 79 at 349-353.
8
[7]
Above n 79 at 11.
[8]
8
See also, for example,
Budlender at 1-19 to 1-22 (Original Service 1998); Chaskalson and Lewis at 31-5
to 31-6 (Revision Service
2, 1998); Erasmus 135-6; Kleyn at 412-413, 417; Lewis
1992 at 430; Murphy (1994) at 389-392. See above n 79.
8
[9]
Limiting the purpose for and
the way in which property may be used, has always been a feature of urban
development law, where the
practice of “zoning” land for specific
purposes is a prime example. (The following passage from para 324 of
“Townships
and Town Planning” by J Meyer in
Law of South
Africa
Vol 28 (establishment volume) is illustrative of the situation in the
past: “The content of town planning is, first, to accord
a use right to
each legally identifiable piece of land in a proclaimed township, dividing it
into use zones such as residential;
special residential; business; commercial
and industrial; or even for educational or municipal purposes; parks;
etc.”) Even
in relation to agricultural land, legislative restrictions
were placed on the sub-division of property (Sections 2 to 4 of the Subdivision
of Agricultural Land Act 70 of 1970) and on the extent of permissible grazing
and other use of the land in order to prevent its deterioration
by, for example,
soil-erosion (see, for example,
section 6
of the
Conservation of Agricultural
Resources Act 43 of 1983
, which provides that “the Minister may prescribe
control measures which shall be complied with by land users to whom they
apply”.)
9
[0]
Gasus Dosier- und
Fördertechnik GmbH v Netherlands
[1995] ECHR 7
;
[1995] 20 EHRR 403
at para 68.
9
[1]
Above n 79 at 101ff.
9
[2]
That this is so worldwide
can be gleaned from the references and examples given by Van der Walt id at
112-4, 116-132 and Van der
Walt (1999) above n 79, at 46-58; 77-81; 89-91;
105-114; 132-150; 176-183; 213-218; 235-241; 250-253; 259-262; 268-273; 293-304;
364-372;384-394; 410-440; 473-489.
9
[3]
Above n 79 at para 31.6, p
31-14 (Revision Service 2,
1998).
9
[4]
Or as Chaskalson and
Lewis put it, id:
“Expropriations, however, must satisfy two additional requirements: they
must be performed pursuant to a public purpose (or,
in the case of the final
Constitution, in the public interest) and must be accompanied by the payment of
just and equitable
compensation.”
9
[5]
Which,
I repeat, reads:
“No one may be deprived of property except in terms of law of general
application, and no law may permit arbitrary deprivation
of
property.”
9
[6]
Beckingham
v Boksburg Liquor Licencing Board
1931 TPD 280
at 282 and
Johannesburg
Liquor Licencing Board v Kuhn
1963 (4) SA 666
(A) at 671C.
9
[7]
[2001] UKHL 26
;
[2001] 3 All ER 433
(HL) 433
at para 28.
9
[8]
Above n 79 at 422.
[9]
9
Id.
1
[0]
0
Above n 79 para
31.5(b)(ii)(bb) at 31-13,14.
[1]
01
Above n 79 1-34 to
1-36.
10
[2]
S v Lawrence; S v
Negal; S v Solberg
1997 (10) BCLR 1348
(CC);
1997 (4) SA 1176
(CC).
10
[3]
Above n 79 para
31.5(b)(ii)(bb) at 31-13,
14.
10
[4]
The section provided
as follows:
“26.
Economic
activity
(1) Every person shall have the right freely to engage in economic activity
and to pursue a livelihood anywhere in the national
territory.
(2) Subsection (1) shall not preclude measures designed to promote the
protection or the improvement of the quality of life, economic
growth, human
development, social justice, basic conditions of employment, fair labour
practices or equal opportunity for all, provided
such measures are justifiable
in an open and democratic society based on freedom and
equality.”
10
[5]
The
relevant passages appear in paras 33, 41 and 44-45 of the judgment, thus:
“[33] . . . [T]he right to engage ‘freely’ in economic
activity should not be construed as conferring such a
right on unqualified
persons; nor should it be construed as entitling persons to ignore legislation
regulating the manner in which
particular activities have to be conducted,
provided always that such regulations are not arbitrary. Arbitrariness is
inconsistent
with ‘values which underlie an open and democratic society
based on freedom and equality’, and arbitrary restrictions
would not pass
constitutional scrutiny.
. . . .
[41] This does not mean that there need be no connection between the
‘design’ [the word ‘designed’ is
used in section 26(2)]
and the ‘end’ sought to be achieved. The requirement that the
measures be justifiable in an open
and democratic society based on freedom and
equality means that there must be
a rational connection between means and
ends.
Otherwise the measure is
arbitrary and arbitrariness is
incompatible with such a society.
. . . .
[44] Section 26 should not be construed as empowering a court to set aside
legislation expressing social or economic policy as
infringing ‘economic
freedom’ simply because it may consider the legislation to be ineffective
or is of the opinion that
there are other and better ways of dealing with the
problems. If s 26(1) is given the broad meaning for which the appellants
contend,
of encompassing all forms of economic activity and all methods of
pursuing a livelihood, then, if regard is had to the role of the
courts in a
democratic society, s 26(2) should also be given a broad meaning. To maintain
the proper balance between the roles of
the Legislature and the courts s 26(2)
should be construed as requiring only that there be
a rational connection
between the legislation and the legislative purpose sanctioned by the section
. . . .
[45] The rational basis test fits the language of the section which, unlike s
33, sets as the criterion that the measures must
be justifiable in an open and
democratic society based on freedom and equality, but does not require in
addition to this that the
measure be reasonable. The proportionality analysis
which is required to give effect to the criterion of
‘reasonableness’
in s 33 forms no part of a s 26 analysis.”
(Emphasis
supplied.)
10
[6]
Above
n 79 at 1-34 to 1-35.
10
[7]
Van
der Walt (1999) above n 79 at 105 states:
“A deprivation in terms of section 25(1) (and this includes
expropriations) has to comply with the requirements of section
25(1) (and
probably also with the more general requirements in section
36).”
10
[8]
1791.
10
[9]
1868.
11
[0]
The “takings
clause” does not form part of the text of the Fourteenth Amendment which
applies to the States, but the
Supreme Court has read the takings clause into
the due process clause by reasoning that a taking of property for public use
without
the payment of compensation would violate the notion of due process as
required under the Fourteenth Amendment.
Chicago Burlington and Quincy
Railroad v City of Chicago
[1897] USSC 56
;
166 US 226
(1897).
[1]
11
Van der Walt (1999) above
n 79 at 423.
11
[2]
Ibid at 413.
11
[3]
114 S Ct 2309
(1994).
11
[4]
Id 2319-2320.
11
[5]
Allen, T
“Commonwealth Constitutions and the Right not to be Deprived of
Property”
(1993) 42
Int & Comp LQ
523
at 525.
11
[6]
See
Bank of New South
Wales v The Commonwealth
(1948) 76 CLR 1
at 349-350.
11
[7]
Compare discussion in Van
der Walt (1999) above n 79 at 54.
11
[8]
Mutual Pools &
Staff Pty Ltd v The Commonwealth of Australia
[1994] HCA 9
;
(1994) 179 CLR 155
at
170-172.
11
[9]
[1994] HCA 10
;
(1994) 179 CLR 270.
12
[0]
(1999) 167 ALR 392.
[1]
21
Above n 119 at
292-293.
1
[2]
2
Id at 294.
12
[3]
Above n 120.
12
[4]
Above n 118 at
177-178.
12
[5]
Airservices
above
n 120 at para 98 per Gleeson CJ and Kirby J. See also paras 166, 501-503,
517-519.
12
[6]
Id at para 98.
12
[7]
Sporrong &
Lönnroth v Sweden
[1982] ECHR 5
;
[1982] 5 EHRR 35
at para 61;
James v United
Kingdom
[1986] ECHR 2
;
[1986] 8 EHRR 123
at para 37.
12
[8]
Gudmunder Gudmundson v
Iceland
(1960) YB 3 394.
12
[9]
X & Y v United
Kingdom
(1973) 44 CD 29.
13
[0]
X v The Netherlands
(1971) YB 14 224.
[1]
31
X v Austria
(1979)
13 DR 27.
13
[2]
The
“AGOSI
case” (
Allgemeine Gold- und Silberscheideanstalt AG v The United
Kingdom
(1987) ECHR Series A vol 108).
1
[3]
3
X v Austria
[1979]
13 DR 27 and
Fredin v Sweden
[1991] ECHR Series A vol 192.
13
[4]
X v Austria
[1979]
13 DR 27;
Fredin v Sweden
[1991] ECHR Series A vol 192;
X v Federal
Republic of Germany
[1959] YB 3
244.
13
[5]
“(1) Das
Eigentum und das Erbrecht werden gewährleistet. Inhalt und Schranken werden
durch die Gesetze bestimmt.
(2) Eigentum verpflichtet. Sein Gebrauch soll zugleich dem Wohle der
Allgemeinheit dienen.
(3) Eine Enteignung ist nur zum Wohle der Allgemeinheit zulässig. Sie darf
nur durch Gesetz oder auf Grund eines Gesetzes erfolgen,
das Art und
Ausmaß der Entschädigung regelt. Die Entschädigung ist unter
gerechter Abwägung der Interessen
der Allgemeinheit und der Beteiligten zu
bestimmen. Wegen der Höhe der Entschädigung steht im Streifalle der
Rechtsweg
vor den ordentlichen Gerichten offen.” See also Van der Walt
(1999), above n 79 at 121 for a discussion of an appropriate
translation.
13
[6]
This
distinction was drawn in 1981 by the Federal Constitutional Court in the
important “Nassauskiesung” decision (BVerfGE
58, 300). Van der Walt
(1999) above n 79 deals with the case at 142. See also Donald Kommers
The
Constitutional Jurisprudence of the Federal Republic of Germany
1997 Duke
University Press Durham at 257, who refers to the judgment as the
“Groundwater Case” (with translated extracts)
and Sabine Michalowski
and Lorna Woods
German Constitutional Law
1999 Ashgate Aldershot at 326
where it is called the “Gravel Decision”.
13
[7]
See Joachim Wieland
“Art. 14 GG” in Horst Dreier (ed.)
Grundgesetz Kommentar
1996
Mohr Siebeck Tübingen, Art. 14 GG at para 73; Jochen Rozek
Die
Unterscheidung von Eigentumsbindung und Enteignung
1998 Mohr Siebeck
Tübingen (Series: Jus Publicum 31) at 144-146 and 225; Brun-Otto Bryde
“Art. 14 GG – Eigentum
und Erbrecht” in Ingo von Münch /
Philip Kunig
Grundgesetz-Kommentar
1992 (4th edition) C.H.Beck
München, Art. 14 GG at para 58.
13
[8]
BVerfG, NJW 1990, 1229
–
Beschlagnahme und Einziehung von Elfenbeingegenständen
(“Attachment and forfeiture of ivory objects”).
13
[9]
See Kommers (above n 136)
at 254-255; Michalowski and Woods (above n 136) at 322-324; Van der Walt (1999)
above n 79 at 135-136;
Wieland (above n 137) Art. 14 GG at para 80 and 118-122;
Bryde (above n 137) Art. 14 GG at para 59-65. Leading cases in that regard
are
e.g. BVerfGE 37, 132 –
Mieterschutz
case (1974); BVerfGE 53, 257
–
Versorgungsausgleich
case (1980); BVerfGE 83, 201 –
Bergrechtliches Vorkaufsrecht
Case (1991).
14
[0]
Cf. BVerfGE 58, 300 (351)
–
Nassauskiesung
case (1981): “Within the framework of Art.
14(1) GG [the legislator] may restructure individual legal positions by issuing
an
appropriate and reasonable transitional provision whenever the public
interest merits precedence over some justified confidence .
. . in the
continuance of a vested right.” (“[Der Gesetzgeber] kann im Rahmen
des Art 14(1) GG durch eine angemessene
und zumutbare Übergangsregelung
individuelle Rechtspositionen umgestalten, wenn Gründe des Gemeinwohls
vorliegen, die den
Vorrang vor dem berechtigten ( . . . ) Vertrauen auf den
Fortbestand eines wohlerworbenen Rechtes verdienen.”)
[1]
41
The leading case in this
regard is BVerfGE 58, 137 –
Pflichtexemplar
Case (1981)
(“Deposit Copy”).
14
[2]
As formulated in
Associated Provincial Picture Houses v Wednesbury Corporation
[1948] 1 KB
223.
14
[3]
As to which see PP Craig
Administrative Law
3ed (Sweet and Maxwell, 1994) 409-421.
1
[4]
4
See, for example,
R v
Secretary of State for the Home Department, Ex Parte Hindley
[2000] 1 QB 152
(CA) 177G and
Halsbury’s Laws of England
vol 1(1) 4ed (2001
Reissue) para 88 fn 7.
14
[5]
R v Ministry of
Defence, ex parte Smith and other appeals
[1995] EWCA Civ 22
;
[1996] 1 All ER 257
(CA)
263c-e.
14
[6]
In
R v Lord Saville of
Newdigate and others, ex parte A and others
[1999] EWCA Civ 3012
;
[1999] 4 All ER 860
(CA) per
Lord Woolf MR.
14
[7]
Above n 145 at
264g-j.
14
[8]
Above n 146 at
871e-f.
14
[9]
Above n 119.
15
[0]
Id at 275.
[1]
51
Id at 279.
15
[2]
Id at 295.
15
[3]
Above n 120.
15
[4]
Id para 96 per Gleeson CJ
and Kirby J.
1
[5]
5
Id para 101 per Gleeson
CJ and Kirby J.
15
[6]
Id para 351 per McHugh
J.
15
[7]
[1952] HCA 30
;
(1952) 86 CLR 169.
15
[8]
Id at 181.
15
[9]
Id at 178.
16
[0]
Id at 178-179.
[1]
61
Above n 90.
16
[2]
See above para 84.
16
[3]
Above n 90 at 433.
16
[4]
Id paras 65, 66 and 68
and para 4 of the dissenting judgment.
16
[5]
S v Makwanyane
[1995] ZACC 3
;
1995 (6) BCLR 665
(CC);
1995 (3) SA 391
(CC) at para 109;
National Coalition
for Gay and Lesbian Equality v Minister of Justice
1998 (12) BCLR 1517
(CC);
1999 (1) SA 6
(CC) at para 41.
1
[6]
6
See n 164 para 68
16
[7]
Id para
70.
16
[8]
Section 36(1)
provides as follows:
“The rights in the Bill of Rights may be limited only in terms of law of
general application to the extent that the limitation
is reasonable and
justifiable in an open and democratic society based on human dignity, equality
and freedom, taking into account
all relevant factors,
including—
(a) the nature of the right;
(b) the importance of the purpose of the limitation;
(c) the nature and extent of the limitation;
(d) the relation between the limitation and its purpose; and
(e) less restrictive means to achieve the
purpose.”
16
[9]
[1995] ZACC 3
;
1995
(6) BCLR 665
(CC);
1995 (3) SA 391
(CC) para 104.
17
[0]
1998 (12) BCLR 1517
(CC);
1999 (1) SA 6
(CC) para 33-35.
[1]
71
Above n 1 at 335B.
17
[2]
Id.
17
[3]
Ferreira v Levin NO;
Vryenhoek v Powell NO
1996 (1) BCLR 1
(CC);
1996 (1) SA 984
(CC) para
157.
17
[4]
Chief Lesapo v North
West Agricultural Bank
[1999] ZACC 16
;
1999 (12) BCLR 1420
(CC);
2000 (1) SA 409
(CC).
17
[5]
Id para 10.
17
[6]
Metcash Trading
Limited v The Commissioner for the South African Revenue Service and Another
2001 (1) BCLR 1
(CC);
2001 (1) SA 1109
(CC).
1
[7]
7
Id para
51.
17
[8]
Section 172(1)(b)
reads as follows:
“172. Powers of courts in constitutional matters.—(1) When
deciding a constitutional matter within its power, a
court—
(a) . . .
(b)
may make any order that is just and equitable,
including—
(i)
an order limiting the retrospective effect of the declaration of
invalidity; and
(ii) an order suspending the declaration of invalidity for any period and
on any conditions, to allow the competent authority to
correct the defect.
17
[9]
S v Bhulwana; S v
Gwadiso
[1995] ZACC 11
;
1995 (12) BCLR 1579
(CC);
1996 (1) SA 388
(CC) para 32.
18
[0]
S v Ntsele
1997
(11) BCLR 1543
(CC);
[1998] 1 All SA 15
(CC) paras 12-14.
[1]
81
Above n 1 at
337B-D.
18
[2]
Section 167(3)(b)
provides:
“The Constitutional Court –
. . .
(b) may decide only constitutional matters, and issues connected with
decisions on constitutional
matters”.
18
[3]
By
mistake referred to in the High Court order as Case no: 1901/94.
18
[4]
This is the order made by
the High Court on 2 March 2001 as subsequently amended on 26 April 2001. It is
to be noted that the High
Court order, as reflected in both the Butterworths
Constitutional and the South African Law Reports does not reflect the amendment
brought about by the order of 26 April 2001.