1constitutional court of south africa

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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.”

105The 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.)

106Above n 79 at 1-34 to 1-35.

107Van 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).”



110The “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 166 US 226 (1897).

111Van der Walt (1999) above n 79 at 423.

112Ibid at 413.

113114 S Ct 2309 (1994).

114Id 2319-2320.

115Allen, T “Commonwealth Constitutions and the Right not to be Deprived of Property” (1993) 42 Int & Comp LQ 523 at 525.

116See Bank of New South Wales v The Commonwealth (1948) 76 CLR 1 at 349-350.

117Compare discussion in Van der Walt (1999) above n 79 at 54.

118Mutual Pools & Staff Pty Ltd v The Commonwealth of Australia (1994) 179 CLR 155 at 170-172.

119(1994) 179 CLR 270.

120(1999) 167 ALR 392.

121Above n 119 at 292-293.

122Id at 294.

123Above n 120.

124Above n 118 at 177-178.

125Airservices above n 120 at para 98 per Gleeson CJ and Kirby J. See also paras 166, 501-503, 517-519.

126Id at para 98.

127Sporrong & Lönnroth v Sweden [1982] 5 EHRR 35 at para 61; James v United Kingdom [1986] 8 EHRR 123 at para 37.

128Gudmunder Gudmundson v Iceland (1960) YB 3 394.

129X & Y v United Kingdom (1973) 44 CD 29.

130X v The Netherlands (1971) YB 14 224.

131X v Austria (1979) 13 DR 27.

132The “AGOSI case” ( Allgemeine Gold- und Silberscheideanstalt AG v The United Kingdom (1987) ECHR Series A vol 108).

133X v Austria [1979] 13 DR 27 and Fredin v Sweden [1991] ECHR Series A vol 192.

134X 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.

135“(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.

136This 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”.

137See 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.

138BVerfG, NJW 1990, 1229 – Beschlagnahme und Einziehung von Elfenbeingegenständen (“Attachment and forfeiture of ivory objects”).

139See 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).

140Cf. 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.”)

141The leading case in this regard is BVerfGE 58, 137 – Pflichtexemplar Case (1981) (“Deposit Copy”).

142As formulated in Associated Provincial Picture Houses v Wednesbury Corporation [1948] 1 KB 223.

143As to which see PP Craig Administrative Law 3ed (Sweet and Maxwell, 1994) 409-421.

144See, 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.

145R v Ministry of Defence, ex parte Smith and other appeals [1996] 1 All ER 257 (CA) 263c-e.

146In R v Lord Saville of Newdigate and others, ex parte A and others [1999] 4 All ER 860 (CA) per Lord Woolf MR.

147Above n 145 at 264g-j.

148Above n 146 at 871e-f.

149Above n 119.

150Id at 275.

151Id at 279.

152Id at 295.

153Above n 120.

154Id para 96 per Gleeson CJ and Kirby J.

155Id para 101 per Gleeson CJ and Kirby J.

156Id para 351 per McHugh J.

157(1952) 86 CLR 169.

158Id at 181.

159Id at 178.

160Id at 178-179.

161Above n 90.

162See above para 84.

163Above n 90 at 433.

164Id paras 65, 66 and 68 and para 4 of the dissenting judgment.

165S v Makwanyane 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.

166See n 164 para 68

167Id para 70.

168Section 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.”

1691995 (6) BCLR 665 (CC); 1995 (3) SA 391 (CC) para 104.

1701998 (12) BCLR 1517 (CC); 1999 (1) SA 6 (CC) para 33-35.

171Above n 1 at 335B.


173Ferreira v Levin NO; Vryenhoek v Powell NO 1996 (1) BCLR 1 (CC); 1996 (1) SA 984 (CC) para 157.

174Chief Lesapo v North West Agricultural Bank 1999 (12) BCLR 1420 (CC); 2000 (1) SA 409 (CC).

175Id para 10.

176Metcash Trading Limited v The Commissioner for the South African Revenue Service and Another 2001 (1) BCLR 1 (CC); 2001 (1) SA 1109 (CC).

177Id para 51.

178Section 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) . . .

may make any order that is just and equitable, including—

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.

179S v Bhulwana; S v Gwadiso 1995 (12) BCLR 1579 (CC); 1996 (1) SA 388 (CC) para 32.

180S v Ntsele 1997 (11) BCLR 1543 (CC); [1998] 1 All SA 15 (CC) paras 12-14.

181Above n 1 at 337B-D.

182Section 167(3)(b) provides:

“The Constitutional Court –

. . .

(b) may decide only constitutional matters, and issues connected with decisions on constitutional matters”.

183By mistake referred to in the High Court order as Case no: 1901/94.

184This 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.

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