Rex v Hanid Ltd and Another

• Jurisdiction: South Africa
• Judge: Millin J, and Ramsbottom J
• Judgment Date: 11 April 1950
• Court: Transvaal Provincial Division
• Hearing Date: 11 April 1950
• Citation: 1950 (2) SA 587 (T)

Rex v Hanid Ltd and Another
1950 (2) SA 587 (T)

1950 (2) SA p587

Citation	1950 (2) SA 587 (T)
Court	Transvaal Provincial Division
Judge	Millin J, and Ramsbottom J
Heard	April 11, 1950
Judgment	April 11, 1950

Flynote : Sleutelwoorde

Asiatic — Asiatic company causing fixed property, situate outside area referred to in sec. 2 of Law 3 of 1885 (T.), to be registered in its name — Whether a criminal offence.

Headnote : Kopnota

An Asiatic company which causes fixed property, situate outside the area referred to in section 2 of Law 3 of 1885 (Transvaal), to be registered in its name does not commit an offence by doing so.

Case Information

Appeal from a conviction in a magistrate's court. The facts appear from the reasons for judgment.

G. Findlay, K.C. (with him D. J. Curlewis), for the appellants: It is legally impossible for an Asiatic company to 'hold' land, see sec. 2 (2) of Act 37 of 1919. The word 'hold' in the sub-section can only mean effective registration, which is impossible. Sec. 2 (5) provides for instant forfeiture on registration, see Bobert v Ettlinger and Grimwood (1937, W.L.D. 28), and therefore the 'holding' never comes into existence. Registration plus forfeiture is no offence under sec. 10, the penalty is automatic forfeiture. 'Holding' in the direct form is impossible. Holding indirectly through an agent or trustee is possible. This entails an offence by the trustee (sec. 2 (4)), but not by the Asiatic. Forfeiture is all that happens to the Asiatic. Toffee v Prudential Building Society and Others (1944 W.L.D. 186 at p. 190); Collin v Toffie (1944 AD 456, at p. 463/4); Master Compressed Yeast Co. (Pty.), Ltd v Commissioner of Customs and Excise (1944, (4), S.A.L.R.

1950 (2) SA p588

813 at p. 819). The general scheme of the Act shows that section 2 (2) provides for a disqualification and not for an offence. (a) In a public company Asiatic shareholding is lawful and stands, see sec. 3. But if the majority of shareholders become Asiatics, the company becomes Asiatic. The shareholding is still lawful, but land previously 'held' immediately passes to the State (sec. 2 (4)). Similarly land purchased passes at once to the State on registration. It must be noted that it is no offence to be an Asiatic company, nor to become an Asiatic company. It merely effects a forfeiture by operation of law. The company must do nothing - its secretary or director must advise the Registrar (sec. 3 (2)). This personal failure is an offence because the State ust be advised. The company never holds. (b) In a private company the attack is both upon the shareholding and upon the land. (i) If ab origine the private company holds land it cannot have an Asiatic shareholder. As soon as the share is registered it forfeits automatically under sec. 3. (ii) If the private company has no land, but acquires it thereafter, then a minority Asiatic shareholding is forfeited to the State, but the land holding remains good. (iii) If the private company has no land and is Asiatic in character having a majority of Asiatics as members, then any land acquired can never be held by it. Immediately on registration it forfeits to the Crown under sec. 2 (5). The shareholding remains lawful. It is noteworthy that only the trust-holder under sec. 2 (4) and the secretary or director under sec. 3 (2) are made to commit offences. The forfeiters do not commit offences because they cannot 'hold' at all.

K. Moodie, for the Crown: It is submitted that secs. 2 (1), 2 (2) and 10 must be read together to create an offence. On the question as to whether an enactment creates an offence, see Rex v Zinn (1946 AD 346 at p. 354). In Rex v Moola (1949, (3), S.A.L.R. 270 at p. 272), sec. 2 (2) was held to be prohibitory and therefore the cases discussed in Zinn's case (supra) are material. It is clear from Ex parte Liquidator Varachia Stores (Pty.), Ltd. (1940 TPD 17 at p. 22) that a company can one day be an Asiatic company and the next day not. The interpretation given to sec. 2 (5) in Bobert's case (supra) is purely obiter. It is submitted that sec. 2 (5) does not involve automatic forfeiture. See further Dadoo, Ltd. and Others v Krugersdorp Municipal Council (1920 AD 530).

Findlay, K. C., in reply.

Judgment

Millin, J.:

This is an appeal from a conviction in the court of the magistrate of Bloemhof. The charge to which the appellants pleaded not guilty reads as follows:

'That Hanid Ltd., a corporate body, as represented by Kulsam Mahomed Samrod, an Asiatic female (hereinafter referred to as accused No. 1) and Kulsam Mahomed Samrod, a director of the said corporate body (hereinafter

1950 (2) SA p589

Millin J

referred to as accused No. 2) are guilty of contravening sec. 2 (2) of Act 37 of 1919 as amended.

In that, after the first day of May, 1930, and at all relevant times to this charge the accused No. 1, an Asiatic company, did wrongfully and unlawfully hold fixed property outside an area assigned for the occupation of Asiatics under para. (b) or (d) of Article 2 of Law 3 of 1885 (Transvaal) to wit, Erven Nos. 92 and 104 Market Street, Bloemhof, in...