Transvaal Investment Co Ltd v Springs Municipality

• Jurisdiction: South Africa
• Judge: Innes CJ, Solomon JA, De Villiers JA, Juta JA and Mason AJA
• Judgment Date: 27 April 1922
• Citation: 1922 AD 337
• Hearing Date: 24 February 1922
• Court: Appellate Division

Innes, C.J.:

The appellant is a private company registered in the Transvaal. Its shareholders are two in number and they are both Asiatics. On the 13th February, 1919, it purchased two erven in Springs township, transfer being taken on the 30th of June following. Since the date of purchase valuable buildings, it is alleged, have been erected on the property. In September, 1921, the Transvaal Provincial Division (STRATFORD, J.) on the application of the respondent municipality enforced the provisions of sec. 2 of Act 37 of 1919 by ordering the sale of the erven. The present appeal is against that order. The statute under which action was taken is drafted on very special lines. It deals with two subjects, the occupation of ground on the Witwatersrand gold fields by British Indians and the acquisition of land by companies controlled by Asiatic shareholders. The first clause enacts that the provisions of secs. 130 and 131 of the Gold Law relating to residence or occupation of proclaimed ground by coloured persons and any similar provisions in the title deed of a Government township shall not apply to British Indians who on the 1st May, 1919, were carrying on business under due licence on any stand in such township or to their successors in title so long as they continued to carry on a business therein. That is a sufficient, though not a complete, summary of the clause. The second section is in the following terms:

"Those provisions of Law 3 of 1885 (Transvaal) and any amendments thereof heretofore enacted which prohibit a person belonging to any of the native races of Asia from being an owner of fixed property in the Transvaal subject to certain exceptions specified in such amendments shall, subject to the same exceptions, be construed also as prohibiting any registration of a mortgage over fixed property in favour of a person belonging to any of the native races of Asia, otherwise than as security for a bona fide loan or investment in the ordinary course of business and also prohibiting the ownership of fixed property in the Transvaal by any company or other corporate body in which one or more persons belonging to those races have a controlling interest and the registration of such a mortgage in favour of such company or corporate body otherwise than as security as aforesaid:

Innes, C.J.

The provisions of this section shall apply as from the 1st May, 1919, provided that in respect of any fixed property acquired by such company or corporate body before the 1st day of May, 1919, the aforesaid provisions of Law 3 of 1885 (Transvaal) shall be construed as if this Act had not been passed. Any such company or other corporate body which may have acquired the ownership of fixed property since the 1st day of May, 1919, shall dispose thereof within a period of two years from the commencement of this Act or within such further period as any superior court having jurisdiction where the property is situate on application may allow, and on the failure of such company or other corporate body so to dispose of such property then and in that case such property shall on the petition of any member of the public be sold by order of such court."

It will be seen at once that the appellant being an Asiatic company, which acquired the ownership of the erven in question after the 1st May, 1919, is amenable to the peremptory provisions of the section unless protected by the earlier proviso. The dispute turns upon the effect of the word "acquired" where it first occurs. If by "acquired" is meant acquired the ownership, then the present transaction falls outside the proviso because ownership was not obtained till the 30th June. But if "acquired" includes the acquisition of a right to ownership then the proviso would apply and the position would have to be considered apart altogether from the Act. So considered the company would, on the authority of Dadoo v Krugersdorp Municipal Council (1920, A.D., p. 530), be entitled to retain its property.

The retrospective character of the Act is beyond doubt; its operation is expressly antedated. Some interference with existing rights must, therefore, have been contemplated. The Court will certainly not construe the provisions of the statute so as to bring about such interference where any other construction is reasonably possible. But if the intention of the Legislature is clear, we must I give effect to it. Now, juristically, the word "acquire" connotes ownership; the ordinary legal meaning implies the acquisition of dominium. To acquire a thing is to become the owner of it. No doubt it may he used in a wider sense so as to include the acquisition of a right to obtain the dominium; but the narrower meaning is the accurate and more obvious one. The subject-matter of the section,

Innes, C.J.

moreover, affords the strongest evidence of intention to use the word in its legal sense. The clause deals with the operation of Law 3 of 1885; it directs that the prohibition of that law relating to the ownership of land by individual Asiatics shall from a specified date be construed as similarly affecting companies controlled by Asiatics. That prohibition was concerned solely with ownership; and though it was expressly declared to be non-retrospective, the law made no reference either by way of exemption or otherwise to previously acquired personal rights. Now, a relieving proviso must naturally deal with the same subject-matter as the main enactment. Any relief granted must be relief from the particular burden imposed. Where, as in this instance, the main enactment prohibits Asiatic companies after a certain date from becoming owners of fixed property, and the proviso makes an exception in respect of property acquired before that date, it would seem to follow that both portions of the clause deal with the same thing, namely, the ownership of land, and that the word "acquired" means acquired in ownership. Mr van Hoytema, in a very able argument, relied upon the difference in phrasing between the portion of the subsection which deals with rights acquired before and the portion which deals with rights acquired after the specified day. In the one case, fixed property "acquired" before the 1st May, 1919, falls within the operation of the proviso; in the other property of which the company has "acquired the ownership" after that date is directed to be sold. Had the Legislature, it was suggested, intended to limit the scope of the proviso to property, the ownership of which had been acquired before the appointed day, it would have used the word "ownership" as it did in the very next sentence. And we were referred to the terms of sec. 21 of Act 2 of 1907 as affording a statutory instance, there the expression "fixed property" acquired was clearly meant to include the acquisition of a right to ownership. The difference in phraseology is certainly striking. But regard being had to the wording of the clause as a whole, it does not carry us far. The variation is not inconsistent with an intention - otherwise obvious - to deal throughout the sub-section with the same subject-matter as the prior legislation, whose construction was being modified - namely, the ownership of land. But it was contended further - and the argument is one by which I have been much pressed - that if "acquired" be taken to mean the acquisition of

Innes, C.J.

ownership, then the proviso becomes superfluous and unnecessary. Because the acquisition of ownership being only prohibited as from the 1st May, 1919, there would be no need to exempt previous acquisitions of that kind from the prohibition. The only way, therefore, to give effect to the proviso would be to construe "acquired" as including the acquisition of a right of ownership - a construction, it was urged, calculated largely to temper the harshness of the legislation. But upon a consideration of the objects of the Act and the circumstances under which it was passed, the above argument fails, and the meaning of the proviso becomes apparent. It is a matter of common knowledge that the two subjects dealt with were at the time, or had long been, burning questions as between Asiatics on the one hand and a section of the European population on the other. The position in regard to them is reflected in many decisions of South African Courts. Khotas & Co. v Treasurer (1909, T.S., p. 180) decided that sec. 133 of the Gold Law of 1898 did not prohibit coloured persons from holding general dealers licences on diggings. But in Krugersdorp Municipality v Beckett & Co., the Transvaal Provincial Division enforcing provisions in a stand title which were identical in substance with the terms of secs. 130 and 131 of the Gold Law held that the occupation by certain Indian licence holders of trading premises in Krugersdorp was illegal. That decision, of course, affected the position of all Indian traders similarly situated. As to ownership, Law 3 of 1885 had enacted (sec. 2 (b) ) that no Asiatic should thereafter be capable of being the owner of fixed property. It was inevitable that attempts should be made to escape the operation of such a provision. That property was sometimes transferred to Europeans in order to be held for the benefit of Asiatics is exemplified by Lucas's Trustees v Ismail (1905, T.S., p. 239). The prevention of such a practice is evidently the object of the provision in sec. 2 of the present Act, which prohibits any mortgage of fixed property in favour of an Asiatic otherwise than as security for a bond fide loan or investment. As time went on, the aid of the company law was invoked. Companies were registered, composed - as in this instance - entirely of Indian shareholders, and transfer of fixed property was made to these corporations. The legality of such transactions came in due course before the Courts. In Reynolds v Oosthuijzen (1916, W.L.D., p. 103) it was held that

Innes, C.J.

Law 3 of 1885 did not prohibit the sale of fixed...