What is “property” that is protected by the Constitution?

The question that arose in the Constitutional Court was whether a commercial trading licence to sell wine in a grocery store constitutes property under section 25 of the Constitution. According to section 25, no-one may be deprived of property except in terms of a law of general application, and no law may permit arbitrary deprivation of property.

The property rights of natural persons can only be fully and properly realised if those rights are also afforded to companies.

The property clause is not restricted to private law notions of property. Section 25 protects other potential constitutional entitlements that deserve protection such as access to natural resources, equitable access to land, access to adequate housing, healthcare services & social security, and even the right to choose a trade, occupation or profession in suitable cases.

Past entitlements do not necessarily warrant protection in perpetuity if reasonable transitional provisions are made. The property rights of natural persons can only be fully and properly realised if those rights are also afforded to companies. Every company is ultimately owned by the holders of shares who are natural persons. Companies are entitled to the same protection as individuals.

The right to sell liquor is clearly definable and identifiable, has value, is capable of being transferred and is sufficiently permanent so that the holder of the right is, in terms of administrative law, protected against arbitrary revocation by the authority issuing the licence. Thus the grocer’s wine licence constitutes property for purposes of section 25(1) of the Constitution.

The Eastern Cape Liquor Act 2003 withdrew the right to sell wine within a retail grocery store and obliged the store to sell the wine from separate licenced premises after ten years. In Shoprite Checkers v Member of the Executive Council for Economic Development, Environmental Affairs and Tourisms: Eastern Cape, it was held to be a rational and not an arbitrary change to the licensing system and the court refused to interfere with the decision of the Eastern Cape legislature. The law was upheld.

The courts must exercise restraint and not interfere with the legislature’s functions that are not unconstitutional.

Even if a court disagrees with the legislature on the legislative facts giving rise to the law, it does not mean the democratic choice made by the legislature is irrational or unreasonable. The courts must exercise restraint and not interfere with the legislature’s functions that are not unconstitutional. The law was held to be eminently reasonable and non-arbitrary.