Shoprite Checkers (Pty) Ltd v MEC for Economic Development, Eastern Cape and Others

• Jurisdiction: South Africa
• Judgment Date: 30 June 2015
• Citation: 2015 (6) SA 125 (CC)

Shoprite Checkers (Pty) Ltd v MEC for Economic Development, Eastern Cape and Others
2015 (6) SA 125 (CC)

2015 (6) SA p125

Citation	2015 (6) SA 125 (CC)
Case No	CCT 216/14; [2015] ZACC 23
Court	Constitutional Court
Judge	Mogoeng CJ, Moseneke DCJ, Cameron J, Froneman J, Jappie AJ, Khampepe J, Madlanga J, Molemela AJ, Nkabinde J, Theron AJ and Tshiqi AJ
Heard	March 12, 2015
Judgment	June 30, 2015
Counsel	JJ Gauntlett SC (with MW Janisch and GA du Toit) for the applicant.; EAS Ford SC (with JG Richards) for the respondents.

Flynote : Sleutelwoorde G

Constitutional law — Human rights — Right to property — What constitutes property — Grocer's wine licences — Constitution, s 25(1); Liquor Act 27 of 1989. H

Constitutional law — Human rights — Right to property — Deprivation of property — What constitutes — Act terminating grocer's wine licences — Deprivation not arbitrary — Constitution, s 25(1); Liquor Act 27 of 1989; Eastern Cape Liquor Act 10 of 2003, ss 71(2) and 71(5). I

Headnote : Kopnota

Shoprite Checkers (Pty) Ltd held grocer's wine licences under the Liquor Act 27 of 1989. These permitted it to sell both wine and groceries from its supermarket premises. The Eastern Cape Liquor Act 10 of 2003 changed the regulatory environment, such that liquor could only be sold from premises exclusively selling liquor. The Eastern Cape Act did, though, provide that grocer's wine licences continue for 10 years; and that after five J

2015 (6) SA p126

A years they could be converted to registrations permitting the sale of liquor from dedicated liquor-sale premises.

Shoprite did not, however, convert its licences. Then shortly before the lapsing of the 10-year period, it engaged with the liquor board and the Premier with a view to preserving its rights. It was unsuccessful. It then applied to the High Court to declare that the provisions of the Eastern Cape Act replacing B its rights were constitutionally invalid.

The High Court duly declared ss 71(2) and (5) of the Eastern Cape Act invalid, holding that the grocer's wine licences were property under s 25(1) of the Constitution; that Shoprite was deprived of this property; and that the deprivation was arbitrary.

Shoprite then applied to the Constitutional Court for confirmation of the declaration.

C The court's judgment (Froneman J)

The court prefaced its consideration of the issues with a discussion of the nature of property and its protection. It noted the county's contested conversation about the protection of property, and suggested that the contrasting perspectives could be effectively addressed only by seeking a conception of D property within the rights-and-values framework of the Constitution. A conception according with those values ought to illuminate the kinds of property deserving protection. (Considerations relating to this were that the type of property deserving protection could not be restricted to private-law notions of property; that an individual's right to property was not absolute, but subject to societal considerations; that property ought to serve the E public good; and that neither the subjective interest of the owner nor the economic value of the right could determine the characterisation of the right.) The sought-after conception would have to allow for individual self-fulfilment in the holding of property, while at the same time recognising that the holding of property entailed an obligation not to harm the public good. (Paragraphs [34], [36], [44], [46], [48], [50] and [56] at 140G – 141A, F 141D – E, 145E/F – 146A, 146D – F, 147C, 148B – D and 149E/F.)

The first issue was whether a grocer's wine licence was property under s 25. Held, that it was. (So too was a registration under the Eastern Cape Act.) This because it was clearly definable and identifiable; of value; transferable; sufficiently permanent; and holding it could facilitate an individual's self-fulfilment and dignity. (Paragraphs [6], [64], [66], [68] and [70] at G 132H – 133A/B, 153A/B – D, 153F – G, 154B – C and 154E – F.)

The second issue was whether the Eastern Cape Act had deprived holders of their property. Held, that it had. Holders of grocer's wine licences had after 5 or 10 years lost the right to sell wine and groceries on the same premises. (Paragraphs [6] and [74] – [76] at 132H – 133A/B and 155D – 156D.)

The last issue was whether the deprivation was arbitrary. Held, that it was not. H The means (conversion and ultimately elimination of grocer's wine licences) used to achieve the end (simplification of the licensing system) was quite rational. Moreover, that the Act gave the opportunity to convert the entitlement after five years, and only effected the deprivation after 10, was both reasonable and non-arbitrary. (Paragraphs [6], [83] and [86] at 132H – 133A/B, 157H – 158B and 159C – D.)

I Confirmation of constitutional invalidity withheld. (Paragraphs [88] and [90] at 159G – H and 159H – I.)

Moseneke DCJ's judgment

Moseneke DCJ concurred that the Eastern Cape Act was not inconsistent with the Constitution and that the order of constitutional invalidity should not be confirmed. But it had been unnecessary to decide that the licences were J property — the same conclusion could have been reached by testing the

2015 (6) SA p127

Eastern Cape Act for rationality. The licences themselves were not A property. (Paragraphs [91] and [94] – [95] at 160B – C and 160E – 161B.)

As to what Shoprite had been deprived of, Moseneke DCJ held that it had lost the opportunity to sell table wine alongside groceries. It had not lost the ability to conduct a liquor business: the legislation had given it the opportunity to convert its licences; and it could still apply for licences to sell liquor from dedicated liquor-sale premises. (Paragraphs [100] and [102] at B 162C/D – F and 163A/B – D.)

Concerning what constituted property in s 25, Moseneke DCJ made the following comments:

(1)

The section used the word in a broad sense and did not give a definition. Thus whether an interest was property had to be decided on a case-by-case basis. (Paragraph [104] at 163G – 164B.) C

(2)

Not all government largesse was property — a right was only property if it possessed characteristics justifying such a classification. (Paragraph [113] at 166C/D – 167F.)

(3)

It was unnecessary to develop a wide idea of property in order to protect interests from legislative or executive interference. The Constitution already provided other protections. (Paragraph [115] at 167F – 168F.) D

(4)

Change of government policy — which required withdrawal of entitlements — might be inhibited, if such entitlements were characterised as property, and requiring compensation. (Paragraph [114] at 167C – E.)

Moseneke DCJ was doubtful that a liquor licence could be property. (Paragraph [117] at 168C – E.) This was because:

(1)

Such a characterisation would limit the ability of the legislature to E regulate the industry. (Paragraphs [120] and [124] at 169B – F and 170F – 171B.)

(2)

A licence did not fit the constitutional idea of property: academic authority was to the effect that only vested rights could constitute such property; and rights acquired under state regulation did not vest in their holder. (Paragraphs [122] – [123] at 170B – F.) F

(3)

To recognise liquor licences as property would overly widen the definition of property, and require a narrowing of the definitions of deprivation and arbitrariness. (Paragraphs [124] – [125] at 170F – 171D.)

(4)

A characterisation of liquor licences as property would limit the provinces' constitutional competence to legislate on the sale of liquor. (Paragraph [125] at 171B – D.) G

(5)

An interest's vulnerability to interference would be influential in a decision to characterise it as property. Here administrative law provided ample remedies against executive interference. (Paragraph [128] at 172C – F.)

Held, ultimately, that grocer's wine licences were not property. (Paragraphs [95] and [130] at 161A – B and 173B.) H

Madlanga J's judgment

Madlanga J held that the licences were property. This was supported by the fact that they: endured indefinitely; could not be suspended or cancelled at whim; were of commercial value; and transferable. (Paragraphs [143] and [147] at 177F – 178C and 179E – F.)

Moreover the deprivation was total. Given this, the test for arbitrariness I was stricter. The means would have to be rationally connected to — or justify — the end; and the end would have to be compelling. (Paragraphs [154], [156] and [158] – [159] at 181A/B – C, 181F and 182A – D.)

Here there was no evidence that the ends allegedly sought had been on the minds of the legislation's drafters. (Paragraphs [164] and [166] – [168] at 183D – 184B and 184D – 185C.) J

2015 (6) SA p128

A Accordingly, the deprivation was arbitrary. (Paragraphs [168] – [169] at 185C – E.)

Ultimately, Madlanga J would have confirmed the order of constitutional invalidity. (Paragraph [169] at 185D – G.)

Cases Considered

Annotations

Case law

Southern Africa B

Administrator, Transvaal and Others v Traub and Others 1989 (4) SA 731 (A): referred to

Affordable Medicines Trust and Others v Minister of Health and Others 2006 (3) SA 247 (CC) (2005 (6) BCLR 529; [2005] ZACC 3): referred to

Agri SA v Minister for Minerals and Energy 2013 (4) SA 1 (CC) (2013 (7) BCLR 727; [2013] ZACC 9): dictum in para [42] applied

Albutt v Centre for the Study of Violence and Reconciliation, and Others 2010 (3) SA 293 (CC) (2010 (5) BCLR 391; [2010] ZACC 4): dictum in para [51] applied C

Biowatch Trust v Registrar, Genetic Resources, and Others 2009 (6) SA 232 (CC) (2009 (10) BCLR 1014; [2009] ZACC 14): applied

Brown v Cape Divisional Council and Another 1979 (1) SA 589 (A): referred to D

...