CHAPTER 22 – PROPERTY RIGHTS: SECTION 25

1. Function of the property clause

 Section 25 of the Constitution contains the property clause - the clause providing
for the protection of property as a fundamental right.
 Globally, the function of the property clause is usually on the one hand to provide
a guarantee for the existence and protection of individual rights in property and,
on the other hand, to provide for the possibility and the boundaries of state
interference with those same rights in property.
 No right is absolute or can absolutely be guaranteed.
 Likewise, the guarantee of property cannot be so absolutely enforced that the
state can never interfere with it.
 The state cannot allow an individual to use her property in such a way as to
cause harm or damage to others.
 There are laws that interfere with real property ownership in order to protect
other people and the general public from harm and harm.
 In essence, tax is a form of state interference with property rights.
 Environmental conservation laws can also interfere with people's rights in
property.

2. Nature and scope of the property guarantee

a. Nature of the guarantee

 Section 25 of the Constitution contains a negative guarantee of property, which
means that property or property rights in property may not be restricted unless
certain requirements are met
 The guarantee of property in section 25 thus has two aspects: On the one hand,
it allows for state regulation of the use of private property and, on the other
 hand, it protects private property by ensuring that state interference will occur
only in certain circumstances and subject to strict requirements.
b. Scope of the guarantee
 Section 25 guarantees a wide variety of property rights. This includes all types of
rights (real rights and personal rights) relating to all types of property (movable
and immovable corporeal property, immaterial and intellectual property, and
incorporeal property).

Property in terms of section 25

i Ownership of movable property (ownership of a car)

ii Ownership of immovable property (property rights on a house)

iii Limited real rights in movable property (property on a wrist watch)

iv Limited real rights in immovable property (servitude over a farm)

v Personal rights relating to movables (contractual right to delivery of a car) (?)

vi personal rights relating to immovable property (contractual right of transfer of a

house) (?)

vii Other creditors rights based on contractual and delictual claims (shares in
company, claim against a pension fund)

viii Immaterial property rights (patent, copyright in a book)

ix Labor rights (right to organize in a trade union, right to participate in the

management of an enterprise) (?)

x Claims against state wealth (housing, state pension schemes) (?)

Everything marked with a (?) is still a 50/50 of whether it will be included in section
25.

 In First National Bank of SA ltd Westbank v Commissioner for SARS 2002 – it was
confirmed that ownership of movable and immovable tangibles is included under
section 25
 Ex parte Optimal Property Solutions 2003 – it was decided that registered
praedial servitudes in the form of restrictive conditions are also property included
in section 25
 Shoprite Checkers Ltd v Member of the Executive Council for Economic
Development, Environmental Affairs and Tourism, Eastern Cape 2015 – the court
decided that a liquor trading licence, once granted, was also property protected
under the constitution
 Agri SA v Minister for Minerals and Energy 2013 – the CC stated that the new
statutory rights (prospecting and mining rights in the new order establishes by
Act 28 of 2002) are also included.

c. Enforcement of the guarantee

 Protection on the normal vertical level of enforcement of section 25 will usually
take the form of a court action against the state, to obtain the order that either
the state action is unlawful or the legislation is invalid
 When section 25 is enforced in a horizontal level it will only be allowed in order
to promote the values and spirit of chapter 2 in the sphere of private civil law or
customary law

3. Deprivation Clause: Section 25(1)

 Section 25(1) states that:

No one may be deprived of property except in terms of law of general application, and
no law may permit arbitrary deprivation of property

a) Regulation by way of due process of law

 This subsection guarantees that all interferences done by the state must be
in accordance with a properly promulgated law of the legislator with regards
to private property rights,
 it must also be in accordance with all the required legal procedures in terms
of that law, or by principles of common or customary law.
 Therefore, it is interpreted that section 25(1) of the Constitution ensures that
no owner is deprived of his property in an arbitrary manner.
 While interpreting section 25(1) of the Constitution one must always keep in
mind that no property right is supreme and that all rights can be limited and
 therefore, section 25(1) of the Constitution must be interpreted and
understood as the temporary limitation on the owners’ use and enjoyment of
his property and that this limitation is done in the public’s interest.
 When deprivation of property takes place the property is not necessarily
taken away from the owner, only his freedom and right to use his property
as he pleases is temporarily limited.
 The benefits and disadvantages of these limitations regarding property are
more or less the same for the owner and the public and it is also a general
rule that the owners receives no compensation for the deprivation of his
property
 In First National Bank of SA Westbank v Commissioner of SARS 2002 (CC)
o The court held that the notion of deprivation should be interpreted
widely so as to include all legally significant state interferences with of
limitations of property
 There are two exceptionally important requirements that must be met in
order to ensure the lawful, fair and just deprivation of property from the
owner,
o the first requirement is that the deprivation can only take place in
terms of a law which is generally and equally applicable to everyone
and
o the second requirement is that arbitrary deprivation may not be
permitted by any general law what so ever.
 In First National Bank of SA Westbank v Commissioner of SARS 2002 (CC)
o Is was stated with reference to the second requirement, that a
deprivation would be arbitrary in terms of section 25(1) if there was
insufficient reason for it or if it was procedurally unfair
 Read facts of FNB case on page 351 NB
4. Expropriation clause: section 25(2) and 25(3)

 (2) Property may be expropriated only in terms of law of general application—

o (a) for a public purpose or in the public interest; and
o (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) The amount of the compensation and the time and manner of payment must
be just and equitable, reflecting an equitable balance between the public interest
and the interests of those affected, having regard to all relevant circumstances,
including—
o (a) the current use of the property;
o (b) the history of the acquisition and use of the property;
o (c) the market value of the property;
o (d) the extent of direct state investment and subsidy in the acquisition and
beneficial capital improvement of the property; and
o (e) the purpose of the expropriation.

a) Expropriation and deprivation

Difference:

 Deprivation: restricts the owners use and enjoyment of the property in the public
interest, without necessarily taking the property away (pollution control). Burden
and advantages affect everybody more or less equally
 Expropriation: takes the property away from the owner for public use (building a
dam). Compensation is only paid for expropriation, because it places a urden on
one person only, but for the common benefit of everyone.
 First National Bank of SA Westbank v Commissioner of SARS 2002 (CC)
 o Test all interference with property first with the requirements for a valid
deprivation in Section 25 (1), and determine only if the interference is an
expropriation that must also comply with the requirements of section 25
(2) and (3).
o Expropriation includes only those extensions which constitute a forced sale
of the property for public purposes in terms of section 25 (2).
Expropriations must be accompanied by compensation as prescribed by
section 25 (3).

Distinction:

(aa) deprivations include all legitimate state interference in terms of section 25 (1)
with private property rights. Exceptions that do not constitute expropriation do not
require compensation, but must nevertheless comply with the requirements of
proper procedure, and may not be arbitrary. (First National Bank of SA Ltd t / a
Wesbank v Commissioner for SARS 2002 (CC)).

(bb) Expropriations only include those receipts in receivables on a forced sale of the
property for public purposes in terms of section 25 (2). Expropriations must be
accompanied by compensation as prescribed by section 25 (3).

b. Expropriation of property

c for a public purpose or in the public interest

 Expropriation only for public purposes or permitted in the public interest.

 This means that private property can only be taken in the form of expropriation if
it is done to serve some public purpose or for public benefit, such as the
construction of a dam or a road.

D subject to payment of compensation

 The last element of the expropriation clause prescribes that expropriations must
be accompanied by payment of compensation, but meanwhile Section 25 (3) sets
out the broad framework there, together with the more detailed provisions of the
Expropriation Act 63 of 1975.
 In principle, the remuneration and the time and method of payment must be fair
and fair and establish a fair balance between the public interest and the interests
of those affected by the expropriation.
 More precisely stated: Expropriation must be fair and reasonable taking into
account all relevant factors, including the purpose for which the property is used,
the history of its acquisition and use, its market value, the value of state
subsidies and investments in it and the interests of those affected by the
expropriation.