案例法的比较分析（英文）：案例法的比较分析

POLICE POWER REGULATION OF INTANGIBLE COMMERCIAL PROPERTY AND THE CONSTITUTIONAL PROPERTY CLAUSE: A COMPARATIVE ANALYSIS OF CASE LAW A.J. van der Walt Readers are reminded that this work is protected by copyright. While they are free to use the ideas expressed in it, they may not copy, distribute or publish the work or part of it, in any form, printed, electronic or otherwise, except for reasonable quoting, clearly indicating the source. Readers are permitted to make copies, electronically or printed, for personal and classroom use. Abstract This article analyses case law dealing with >police power= regulation that results in the effective loss or destruction of intangible commercial rights or interests. The cases that deal with this kind of situation are often used interchangeably, but in the article it is argued that it is necessary to distinguish between a number of quite different situations. It is proposed that the following primary distinctions be made for this purpose: the >regulatory= cancellation of state debts; the >regulatory= creation of state monopolies; regulatory interferences with the management of business enterprises; regulation of businesses by way of licences, permits and quotas; and the regulation of immaterial property rights. It is argued that the cases in each of these categories can and should not be applied as authority for any of the other categories, since the problems and solutions for each category differ in fundamental respects. The distinction also makes it easier to argue about the legitimacy of a specific kind of regulatory interference with intangible property: while it is obvious that regulation of businesses by way of licencing is legitimate in principle, it is much more difficult (but still possible) to justify regulations that interfere with the management of a business enterprise, and even more difficult to justify the >regulatory= creation of a state monopoly or the >regulatory= cancellation of a state debt. It follows that the legitimacy of any given interference with intangible property can be considered and discussed more easily within a framework that allows a fundamental evaluation of the nature and effect of different kinds of regulatory action that affects property. This classification also makes it possible to judge the comparative value of foreign case law in a more rational and justifiable manner. Contents 1. Introduction 2. A South African case study 3. Regulatory cancellation of state debts 4. >Regulatory= creation of state monopolies 5. Regulatory interference with the management of business enterprises 6. Regulation by way of licences, permits and quotas 7. Regulation of immaterial property rights 8. Concluding remarks and evaluation 1. Introduction Comparative constitutional case law presents the analyst with a quite bewildering array of precedents regarding the validity, in terms of a constitutional property guarantee, of state interferences with private property interests. The reported cases cover a diversity of topics, ranging from the content and meaning of >property= to the calculation of just and equitable compensation in cases where the property in question is expropriated. In addition to the cases, there is an equally extensive volume of academic commentary, often accompanied by an apology for the confusing state of learning in this field. The purpose of this paper is to suggest an avenue of avoiding at least some of the confusions in this field, by introducing a number of distinctions that highlight the dangers of using decisions in one area as authority for cases in another. I focus on a limited category of cases, defined by three considerations: Firstly, the property in question consists of some kind of intangible commercial right or interest; secondly, the purpose of the state interference with the said property is to regulate, in terms of the state=s police power, the use and exploitation of that property in some way or another; and, thirdly, the effect of the regulation in question is so harsh or extreme that the property interest is lost, destroyed or rendered worthless in the process. The first consideration narrows the analysis down to cases regarding intangible property, and particularly intangible property with some form of commercial interest or value. Included in this category are business enterprises in general; the goodwill of a business concern; shares in a company; debts; a business interest in a commercial licence, permit or quota; immaterial property interests deriving from or connected with patents, copyrights, trademarks and confidential commercial information; and so forth. Occasionally, reference will be made to a case where the property in question was intangible but held individually rather than commercially, but in these cases the question whether the property was owned individually or commercially will usually not make much difference. However, because of the focus on commercial interests certain related issues are ignored B for example, rent control regulation cases are ignored because they normally affect private residential rather than commercial property, and interesting as housing regulation and rent control cases are, they involve unique characteristics and problems all their own that cannot be addressed here. This analysis will not attempt to describe or investigate the constitutional nature and content of intangible commercial rights in any detail either; the nature of the property interest is used as a demarcation criterion here but does not constitute the focus of the investigation. The second consideration narrows the analysis down to instances of state regulation of commercial enterprises and property interests, based on the police power and aimed at the promotion of the public interest. The intention of the state actions and statutes in this category is always to control and regulate the use, enjoyment and exploitation of the property involved, in the public interest. It will be necessary, in the course of the analysis, to refer to wider issues such as the constitutional validity of limitations of entrenched rights and the distinction between deprivations and expropriations of property, but once again the police power nature of regulations features here as a demarcation criterion and not as a central concern. Moreover, cases dealing with land-use regulation, while arguably satisfying this criterion, will be ignored because land-use regulation cases are determined by unique and specific factors not necessarily germane to the regulation of intangible property as such. The third consideration narrows the analysis down to situations where the regulation in question, although it is aimed at police power control over the use and exploitation of property, results in infringements that practically destroy the property rights, thereby raising questions about the nature of the limitation imposed and its general validity. The regulation can have extraordinarily harsh effects because the business is taken over by the state, or because a state monopoly is created at the cost of the private enterprise, or because the state interferes with the management of a commercial enterprise, or because the business that loses its permit or licence cannot function, or for any similar reason. In some cases the loss is caused by a statute that cancels a state debt. Again, the intention here is to analyse cases dealing with regulations that have the defined kind of effect, and not to discuss the wider issues surrounding this category of regulations and their justifiability or validity in general. Some general remarks about the nature of regulation and the public interest it serves are included in the conclusion. While these demarcation principles may seem artificial or arbitrary to some, they have the advantage of isolating a relatively clear field of investigation and thereby reducing the scope of the inquiry to manageable proportions. Some of the implications of this inquiry could be suitable for extension to other areas in the broader field of constitutional property, and perhaps they can even be used to construct a rudimentary basis for a methodology of comparative constitutional property rights. My aim here is more modest, though, and I make no claims in this regard. The main reasons for selecting a topic defined by these rather narrow criteria are that it epitomises some of the most intriguing difficulties that confront a student of constitutional property law, and that the case law on this topic is so interesting and confusing that it deserves special attention anyway. To demonstrate my awareness of the fact that my selection is as significant in its exclusions as in its inclusions, I start the discussion off with a case that does not satisfy the criteria I have identified: Harksen v Lane NO and Another. This is the first case in which the South African Constitutional Court was offered an opportunity to say something substantial about the property clause in section 28 of the interim Constitution of 1993, and it does not really fit into the framework of this discussion because it concerns all the property of the applicant and not just her (individually held) intangible assets. However, patriotism demands that I should start off with a discussion of a South African case, and besides, the Harksen decision offers an opportunity to segue into a discussion of a number of decisions of the Zimbabwe Supreme Court that do satisfy my selection criteria, and that illustrate the problem I had in mind when selecting this topic. In the next section of this paper I discuss the Harksen decision by way of a case study that highlights some of the problems raised by the regulation of intangible commercial property and the case law on that topic. In the case study, I propose that the problems raised by the regulation of intangible commercial property are often exacerbated by the fact that precedent in this area is considered and used very loosely, and not in terms of the distinctive context of different issues and problems. The case study is followed by an analysis of cases in a number of categories that I propose for this purpose: cases dealing with the cancellation of state debts; regulation that creates state monopolies; regulation that interferes with the management of a business enterprise; regulation by way of licences, permits and quotas; and the regulation of immaterial property rights. In each category, I consider a number of cases that may be classified under that heading, and the effect of the classification for the problems and solutions on offer. Finally, I consider the implications and possible value of the classification for the problem of regulation of intangible commercial property as a whole. 2. A South African case study Harksen v Lane NO and Others concerns an attack on the validity of section 21 of the South African Insolvency Act 24 of 1936. Section 21(1) of the Insolvency Act provides that, upon the sequestration of the estate of an insolvent spouse, the property of the solvent spouse shall vest in the master of the Supreme Court and, once one has been appointed, in the trustee of the insolvent estate; and that the solvent spouse=s property shall be dealt with by the master and trustee as if it were property of the sequestrated estate. In De Villiers NO v Delta Cables (Pty) Ltd the former Appellate Division of the Supreme Court stated obiter that the effect of the vesting of the solvent spouse=s property is to transfer full ownership (dominium) of the property from the spouse to the master or trustee. In terms of section 21, the solvent spouse=s property will vest in the master or trustee of the insolvent estate even if it is clear and accepted by the master or trustee that the property in question belongs to the solvent spouse, that the insolvent estate has no claim to it and that there is no question of collusion between the spouses with regard to ownership of the property. Sections 64(2) and 65(1) respectively provide that the officer presiding at meetings of the creditors of the insolvent estate can summon all persons who may be able to provide information relating to the business, affairs or property of the insolvent or of the solvent spouse, and that the presiding officer at such a meeting, as well as the trustee and the creditors of the insolvent estate, may interrogate persons so summoned concerning all matters relating to the business, affairs and property of the insolvent and of the solvent spouse. The applicant=s husband=s estate was sequestrated, and subsequently her property was attached by the trustees of the insolvent estate, and she was summoned to appear and be interrogated at a meeting of her husband=s creditors. The applicant challenged the constitutional validity of sections 21, 64 and 65 of the Act to the extent that they affect the property and affairs of the solvent spouse. She claimed that section 21 is in conflict with section 28(3) of the 1993 Constitution in that it effects an expropriation of her property without compensation; that section 21 is in conflict with section 8 of the 1993 Constitution in that it subjects her to interference and loss of property and that in doing so it violates the equality guarantee and amounts to unfair discrimination; and that sections 64 and 65 are unconstitutional for related reasons. The Cape Supreme Court referred the constitutional challenge to the Constitutional Court, where the majority decided that the provisions of section 21 and the impugned parts of sections 64 and 65 of the Insolvency Act are not inconsistent with the interim Constitution of 1993. The minority agreed with the majority finding on the property question and part of the equality question, but disagreed with the majority decision on the main aspect of the equality issue. For present purposes we are interested in the property issue: the charge that section 21 of the Insolvency Act is inconsistent with section 28(3) of the 1993 Constitution in that section 21 of the Act constitutes an expropriation of the property of the solvent spouse without provision for compensation as required by section 28(3) of the interim Constitution. The basis for this argument is that the vesting of the solvent spouse=s property in terms of section 21 amounts to a transfer of the solvent spouse=s rights in property to the master and (upon appointment) the trustee of the insolvent estate, while making no provision for compensation. In his judgment for the majority Goldstone J pointed out that the distinction between deprivation and expropriation of property, as set out in sections 28(2) and 28(3) of the interim Constitution, is recognised in South African law and in many foreign jurisdictions. The main difference, as the Court described it, is that a deprivation falls short of the >acquisition of rights in property by a public authority for a public purpose= (and usually against compensation) that characterises an expropriation. The Court referred to a decision of the Transvaal Supreme Court and two decisions of the Zimbabwe Supreme Court to support the statement that an expropriation amounts to more than a >mere dispossession=, that it in fact requires the expropriator to appropriate or acquire or become the owner of the property or right in question. On the basis of the considerations mentioned above, Goldstone J decided that the effect of section 21 of the Act, even if it does amount to a transfer of ownership in the solvent spouse=s property to the master or trustee of the insolvent estate, is of a temporary nature and not permanent, and that the purpose is not for the state to acquire the property but to ensure that the insolvent estate is not deprived of property that actually belongs to it, so that this vesting process cannot be described as an expropriation. Consequently it was decided that the effect of section 21 of the Act is not to constitute an expropriation and that the section is therefore not inconsistent with section 28(3) of the Constitution. One may or may not agree with this decision, and in a sense the main problem is not whether this finding is correct, but rather that the constitutional validity of section 21 was tested with reference to section 28(3) only, and not with reference to the requirements for a deprivation of property in terms of section 28(2) of the interim Constitution. This is of course the result of the applicant=s rather limited attack, but that is not the focal point of my interest in the decision. For purposes of this article, the interesting point is the Court=s assumption that the question whether section 21 constitutes an expropriation turns upon the further question whether the state acquired something, and the authority that is offered for this proposition. The assumption that the term >expropriation= in section 28(3) of the interim Constitution has to be interpreted with reference to the actual acquisition by the state of the property is justified with reference to the Transvaal Beckenstrater decision and the Zimbabwean Hewlett and Davies decisions. In my view, the Court=s reliance on these decisions is problematic, since there are fundamental differences between the decisions cited by the Constitutional Court and the case in hand: Hewlett dealt with a law that cancelled an existing state debt to an individual; Davies concerned a law that >designates= certain land for possible future expropriation for purposes of land reform; and Harksen involved the vesting of a solvent spouse=s property to prevent fraudulent dealings to the detriment of innocent creditors. It does not take an overactive imagination to see that the three situations differ in what must surely be essential characteristics. A truly contextual interpretation of any constitutional expropriation provision must take note of and account for these differences between cases. This makes it necessary to consider the comparative authority of similar-looking cases very carefully: in actual fact, the Davies case should not even be mentioned in the same breath as the Hewlett case, even though both are decisions of the Zimbabwe Supreme Court. Both provide authority for the validity of the distinction between deprivations and expropriations, but Davies dealt with regulations that notify the state=s intention to consider the expropriation of the property in future, without acquiring any rights in it for the time being. In Hewlett the law in question cancelled a state debt, thereby destroying the creditor=s right to claim the debt and relieving the state of the duty to pay. The statement that a certain state action does not constitute an expropriation because it does not cause the state to acquire any rights in the property is perfectly acceptable in the context of Davies, but it simply makes no sense in the context of either Hewlett or Harksen. To take the point one step further: the more recent Zimbabwean decision in Chairman, Public Service Commission and Others v Zimbabwe Teachers= Association and Others should also be distinguished carefully from Hewlett, although both dealt with money debts. In Teachers= Association the ratio decidendi was not (as in Hewlett) that a cancellation of a state debt does not constitute an acquisition and therefore also not an expropriation, but rather that the debt in question (teachers= annual bonus) was not a vested right and that the law in question could therefore amend or abolish the annual bonus without thereby affecting an existing property right. Apart from ignoring the differences between various kinds of property, the reasoning of the Harksen court (and the Zimbabwean Supreme Court in the cases referred to) is too simplistic in its analysis of the effects of the regulation concerned. Although there is no clear approach in case law, a comparative analysis suggests that, as far as constitutional property guarantees are concerned, the scope of the term >expropriation= or >compulsory acquisition= cannot simply be restricted to physical dispossessions or actual acquisitions by the state B the distinction between deprivations and expropriations is clearly more complex than that. More particularly, there are instances, especially in the range of intangible property rights, where a complete destruction of a property right by the state could arguably be regarded as an expropriation even though the state >acquires nothing=. Both Hewlett, which deals with laws that purport to >cancel= an existing state debt, and Harksen, which concerns a law that transfers property to an officer of the court to protect the interests of creditors, illustrate the danger of distinguishing between deprivation (by way of regulation) and expropriation of property on the basis of the question whether the state acquires anything in the process. However difficult the distinction between deprivation and expropriation of property may be to make, courts ought to follow a more sophisticated approach than is evident from Hewlett. The considerations set out in the previous paragraphs indicate that academic and judicial discourse on the problem of regulation of intangible commercial property has not come to terms yet with the fact that contemporary property law, especially in the constitutional area, has moved away from its pre-modern roots in the social and economic appreciation of tangible things and the ways in which they are regulated by the modern state. The insistent focus on the classic image of expropriation as a physical taking away and concomitant state acquisition of tangible things (especially land) seems to suggest a lack of theoretical insight in the fundamental changes that characterise property law (and law in general) since the advent of modern society, and particularly in the changes that result from the social and economic (not to mention political) importance of state control over the use and exploitation of intangible (and commercial) property in modern society. There is also a lack of awareness of what >context= really means in the adjudication of constitutional cases: the broader the brush with which different cases are painted into a single category, the less chance of taking full account of the unique features and circumstances that surround each case in fact. This article is an attempt to move towards greater awareness of these changes, differences and their implications, especially in the analysis of constitutional case law. The case study of Harksen and its reference to the Zimbabwean decisions in Hewlett and Davies illustrates some of the problems surrounding the regulation of intangible commercial property rights: unless the characteristics and unique features of different cases in the field of regulation of intangible property are distinguished and accounted for quite carefully, decisions and the reasoning behind them will suffer from unnecessary inconsistency and lack of clarity. This means not only that injustice is done to the individual rights in question, but also that there is insufficient attention for the social, economic and political importance and implications of control and regulation of (intangible) property rights. In the rest of this paper I propose to analyse cases dealing with the regulation of intangible commercial property by distinguishing between a number of situations where this problem assumes different forms and requires different approaches and solutions. In each category I discuss a number of cases to illustrate some of the characteristic features of the problem and the possible solutions that might or might not suit those features. 3. Regulatory cancellation of state debts One of the most controversial areas where the regulation of intangible commercial property results in claims that the results of regulation are expropriatory or confiscatory, is the regulatory cancellation of state debts. Some of the cases that feature in this category involve private rather than commercial property (debts), but these cases are nevertheless often confused with some of the other categories discussed below, and although the cases involve private property there is nothing in the principles evolved below that prevents them from also applying to commercial property of the same nature. What is involved in these cases is a state debt and a law that cancels that state debt, ostensibly for a regulatory purpose. The question usually is whether the effects of the cancellation are really regulatory in nature or whether the state action amounts to an expropriation. The most controversial decision in this area was handed down by the Zimbabwe Supreme Court in Hewlett v Minister of Finance and Another, which was decided in terms of the original 1980 version of section 16 of the Zimbabwean Constitution, prior to the amendment of 1990. The applicant was a farmer to whom a sum of money was awarded in respect of losses suffered as a result of >acts of terrorism= as defined in the Victims of Terrorism (Compensation) Act. Subsequent to the award being made, the Emergency Powers (Stay of Compensation Claims) Regulations 1980 froze all proceedings for compensation and the payment of claims, and shortly thereafter the War Victims Compensation Act 22 of 1980 repealed the initial Compensation Act and provided that no further compensation was to be paid in terms of the repealed Act or in terms of any award, judgment or court order made under that law. The applicant claimed that the regulations and section 38 of the new Compensation Act are unconstitutional on the ground that they violate section 16 of the Constitution. The first part of the decision is uncontroversial. The court favoured a wide interpretation of the undefined term >property= in section 11, the ordinary meaning of which was said to include a money debt. The major part of the judgment focused on the phrase >property of any description or any interest or right therein= in section 16. The court made it clear that this phrase, as used in section 16, must >embrace the widest possible range of property=, and particularly a money debt. The term was explicitly stated to include both movable and immovable property, and both tangible and intangible property. This approach to the scope of the property concept in a constitutional property clause is in line with decisions, such as Attorney-General v Lawrence and Shah v Attorney-General (No. 2), from other Commonwealth jurisdictions. The most important part of the judgment, for present purposes, is the finding that, whatever the position of unresolved claims for compensation may be, an award of compensation once made constitutes a debt which is property for purposes of section 16. In response to the state=s averment that the compensation payment was the product of a >bounty law=, and that it could be cancelled by the state without compensation, the court came to the conclusion that, even if >bounty= payments can be recalled by the state without compensation, >they do not ... establish the principle that the State can withdraw its undertaking to pay a debt which has crystallised=. Given the fact that the compensation payment in question has >crystallised= once the award was made, it has become property which cannot be cancelled without compensation. In other words, the court confirmed the widely established principle that a right will be considered and protected as property once it has vested in the beneficiary. The first part of the Hewlett decision is uncontroversial, but the second part, which deals with the nature and validity of the regulation in question, is not. Initially the court=s approach to the regulation issue looks acceptable. The term >deprivation= does not appear in the Zimbabwean property clause, but the court nevertheless decided that the distinction between deprivations and expropriations forms part of Zimbabwean law, and that the nature and validity of the Compensation Act had to be judged against the background of this distinction. This approach translates the question before the court to the well-known inquiry whether the law in question constitutes a deprivation of property or a compulsory acquisition. The finding is that the state, in promulgating the law and cancelling the debt created by an existing compensation award, did not >acquire anything= even though it destroyed the beneficiary=s claim. Therefore, so the court=s argument goes, the cancellation of the debt amounts to a deprivation of property rather than a compulsory acquisition. In arriving at this conclusion the court accepted an extremely limited and narrow interpretation of >compulsory acquisition=, which means that the cancellation of a state debt, which admittedly constitutes property, is not regarded as a compulsory acquisition. Generally speaking, the court=s analysis of the distinction between non-compensable, non-acquisitive regulation (deprivations) of property in terms of section 11 and compensable compulsory acquisitions of property in terms of section 16 is clear and convincing, but the application of the distinction to the facts of the case is questionable. In accepting the narrow interpretation that restricts >compulsory acquisitions= to situations where the state actually acquires something, the court allowed itself to be misled by conceptual thinking and (poorly argued) private-law dogma, unable to distance itself from the classic perception of expropriation as a process whereby the state physically takes something (particularly land) from someone and uses it for a public purpose. Given the extremely wide interpretation which is (correctly) given to the term >property= in the constitutional context, a similarly wide interpretation should also have been given to the term >acquisition=. To argue that an >acquisition= only takes place, as is the case with tangible property, when that which is lost by the one party actually >goes over to= or is transferred to the recipient is simply wrong, even in traditional private-law dogma. Moreover, this narrow interpretation is flawed by reasoning which does not account for the fact that, in cancelling the debt, the state actually did >acquire something= in the form of a saving or release from the duty to pay. In view of the nature of intangible property which is included in constitutional property guarantees, and given the public-law nature of the constitutional relation between state and citizen, the court=s approach is even less acceptable. In a situation where the state is in a position to use its state power to make a law that benefits itself by nullifying an existing and >crystallised= debt, and thereby deprive a citizen of property, the inequality of the relationship between the state as lawmaker and the citizen as creditor should suffice to indicate that a more sympathetic interpretation of the acquisition requirement is required. To acknowledge the deprivation of the plaintiff and the simultaneous benefit of the state and still refuse to regard the action as an acquisition amounts to sophistry. A completely different approach was followed by the Uganda High Court in Shah v Attorney-General (No. 2). The plaintiff concluded a contract with the former government of Buganda in terms of which, once he fulfilled his obligations under the contract, he was entitled to a money payment from the government. Shortly afterwards the kingdom of Buganda ceased to exist and the government of Uganda took over the assets, rights and liabilities of the former administration in terms of the Local Administrations Act 1967. The government refused to pay the amount still outstanding to the plaintiff and the plaintiff obtained judgment against the government. The government did not appeal but failed to pay the judgment. The plaintiff applied for a mandamus on the officials responsible for payment. The Attorney-General applied for a dismissal of the plaintiff=s application on grounds of section 2(1) of the Local Administrations (Amendment) (No. 2) Act 1969, which had been passed subsequent to the judgment and which made all contracts with the former Buganda government unenforceable except insofar as they had been ratified by the Minister. The Act also made provision for the dismissal of any proceedings based on an unratified contract regardless of any judgment already given in such proceedings. The plaintiff challenged the relevant provisions of the Act on the grounds that they were unconstitutional as they amounted to a deprivation of property without compensation. There are differences between this case and the Zimbabwean Hewlett case, mostly due to differences in the structure of the >double= guarantee in each of the relevant constitutions. The most important difference is that the Ugandan property clause, because of the way in which it is structured, guarantees compensation for both compulsory acquisitions and deprivations of property. However, these differences are not fundamental, and the cases remain comparable, mainly because the Ugandan Constitution allows the question of compensation to be raised with regard to deprivations of property as well as compulsory acquisitions. Like the Zimbabwe Supreme Court, the Uganda High Court also decided that >property= referred to in the Ugandan Constitution must be interpreted widely to include any form of property whatsoever, and that a judgment debt establishes a form of personal property which is protected by the general, introductory guarantee against deprivations in section 8(2)(c). Moreover, the court decided that a deprivation in the form of a cancellation of a judgment debt against the state entails enrichment for the state in the form of absolvement from the duty to pay, and therefore rejected the argument that the state acquired nothing in the process. A similar approach was followed by the Australian Federal Court in Peverill v Health Insurance Commission. Peverill was a specialist pathologist who rendered certain pathology services to the state. He sued the Health Insurance Commission for Medicare benefits due to him for these services in terms of the Health Insurance Act 1973. The Health Insurance (Pathology Services) Amendment Act 1991 effected certain retrospective changes to the Health Insurance Act, with the result that Peverill=s right to payment by the Commonwealth was extinguished. Peverill claimed that the amendment act was ultra vires and beyond the power of the parliament of the Commonwealth on the grounds that it amounted to an acquisition of property other than on just terms, contrary to section 51(xxxi) of the Commonwealth Constitution 1900. The Federal Court pointed out explicitly that the right which the plaintiff had to payment of the statutory debt in question was property within the meaning of section 51(xxxi) of the Commonwealth Constitution. Since the Amendment Act did not only extinguish the debt, but resulted in a clear and direct benefit accruing to the state, it is clear that this property was acquired by the state as meant in section 51(xxxi). The right acquired by the state consists in the benefit of not having to pay the debt. Although it may be possible to acquire property without compensation legitimately in some cases, this was not such a case, and therefore the property was acquired without just terms, in conflict with the property guarantee. The principles deriving from the Ugandan Shah decision and the Australian Peverill decision clearly contradict the Zimbabwean Hewlett decision, and in my view they present the better arguments and authority for cases of this nature. They have been confirmed in a number of other cases dealing with the salaries of state employees and with a statutory freeze of public servants= wages. The principles can be summarised as follows: - A money debt, once vested according to the normal principles of law, constitutes property for purposes of the protection of a constitutional property clause. Such a debt can vest by contract, or by court order, or by legislation, depending on the nature of the debt. - A statutory cancellation of such a vested debt benefits the state by absolving it from the duty to pay, and therefore constitutes a compulsory acquisition of property, which may be subject to payment of compensation in terms of the relevant property clause. An interesting variation on the question of cancellation of state debts appears in the decision of the Zimbabwe Supreme Court in Chairman, Public Service Commission, and Others v Zimbabwe Teachers= Association and Others. Public servants in Zimbabwe had been paid an annual bonus since 1974. In September 1995 it was announced by regulation that the annual bonus for 1995 would not be paid. The Zimbabwe Teachers= Association attacked this decision on behalf of all public servants, averring that it was unlawful and unconstitutional to withhold the bonus. The High Court declared the regulation unlawful, and the Public Service Commission appealed against this decision. The question was whether the regulation amounted to a compulsory acquisition of property in conflict with the property clause in the Zimbabwean Constitution. The majority of the Supreme Court decided that an annual bonus is part of a public servant=s remuneration, but distinct from and not part of the salary as such, and that a bonus could consequently be reduced or eliminated lawfully, provided it was done in proper form and that there was no provision in the Constitution or elsewhere that forbade such action. This decision was based on the finding that a bonus does not become a vested right before the year in question is completed. This part of the decision, based as it was on a finding on the facts, seems acceptable, although the minority disagreed, arguing that the bonus was a vested right and therefore property that was protected by section 16. However, the majority chose to proceed beyond the factual finding and make a further ruling on the possibility that the bonus was property. In such a case, the majority decided, even though the law in question extinguishes a state debt and although the state gains a corresponding benefit, the state does not acquire any right or interest which it did not possess before, and therefore the cancellation of the bonus does not amount to a compulsory acquisition that was affected by section 16. This finding is in line with the Supreme Court=s earlier finding in the Hewlett case, and in conflict with the other decisions referred to above. On the basis of the analysis above it seems reasonably clear that a state action that cancels or destroys a vested state debt should probably, depending on the structure and phraseology of the relevant constitutional property clause, be regarded as an expropriation rather than a mere regulation of the property in question and should, therefore, either be in conflict with or require compensation in terms of the property clause. However, this cannot be proposed as a general and absolute rule. There might be cases where the cancellation of the debt in question, without >compensation=, could be reasonable and justifiable in terms of the constitutional provisions concerned. This would arguably, especially be the case when the debt was created and vested under circumstances that are morally or politically objectionable. A similar situation arose in Namibia in the case of Cultura 2000 and Another v Government of the Republic of Namibia and Others. The first applicant was a non-profit association, incorporated prior to the independence of Namibia, for the purpose of coordinating the activities and interests of cultural organisations aimed at promoting Western European cultural activities in Namibia. In 1989 the association bought a farm from the then representative authority for whites (RAW), and later the RAW donated a substantial sum of money to the association, subject to the condition that it should be seen as >a donation for founding purposes to promote, develop and extend the cultures of the Afrikaner, German, English and Portuguese or other communities of European descent=. On the same day the RAW lent another sum to the association on very lenient terms. A short time before Namibia=s independence, the loan was converted to a donation by the Administrator-General. The new government of Namibia promulgated the State Repudiation (Cultura 2000) Act 32 of 1991 (Nm), section 2(1) of which repudiated any sale, donation or other alienation of movable or immovable property to or in respect of the association, under laws in force prior to the independence of Namibia, by the government or an official of the Republic of South Africa. The Act was stated to have been promulgated in terms of article 140(3) of the Namibian Constitution, which states that anything done under laws in force prior to independence by the government or an official of the Republic of South Africa shall be deemed to have been done by the government or an official of the Republic of Namibia, unless repudiated by an act of parliament. The applicants challenged the constitutionality of the Act on the grounds that it was contrary to article 16 of the Constitution. The court accepted that the property guarantee in article 16(1) of the Namibian Constitution includes both tangible and intangible property (in this case farms and money), but the court held that the expropriation provision in article 16(2) cannot apply with regard to money, since it would be >completely and utterly nonsensical= to expropriate money against payment of just compensation in the form of (the same amount of) money. On the basis of this finding the expropriatory part of the Act was held to be unconstitutional, and declared ultra vires and invalid by the High Court. On appeal, the Supreme Court of Namibia was not willing to actually decide that a cancellation of the debt was constitutionally in order because of moral objections to the way in which it was created and vested in the organisation, but the decision did make it possible for the new Namibian government to distance itself from the obligation without releasing them from paying the debt. The interesting part of the decision a quo, in terms of which the essential section 2(2) of the Act was declared ultra vires and invalid, was not under discussion in the appeal, and the only question was whether the repudiatory section 2(1) of the Act was valid. The Supreme Court decided that section 2(1) does not invade the property rights or other rights of the respondent, because the only effect of this section was that the Namibian government restored the real state of affairs, namely that the action by which the property was given to the respondent was an action of the former administration, and not of the Namibian government. The effect of sections 2(2) and 3 of the Act was to declare the donation of the property to the respondent null and void, but these sections were already declared invalid by the court a quo and were not in issue on appeal. The end result was, therefore, that the debt was upheld but in terms of a framework that at least allowed the new Namibian government to distance itself from the moral obligations it involved. Because of the restricted nature of the appeal the Supreme Court was not asked to decide on the validity of the section of the Act that declared the debt subject to repudiation. In my view, the really interesting question is whether a debt of this nature, coloured by moral objections to the way in which it was created and vested by a former regime, can be cancelled by a new regime without falling foul of the compulsory acquisition provisions in the property clause. It seems possible, if there is sufficient contextual (social, economic and political) justification, that such a cancellation could be reasonable and justifiable in terms of a constitutional property clause: a truly (and legitimate) regulatory cancellation of a state debt. 4. >Regulatory= creation of state monopolies A second category of cases where the regulation of commercial property often results in claims that the effects of the regulation are expropriatory or confiscatory, concerns the situation where the regulation in question, usually in the form of production, trade or import/export regulations pertaining to a certain commercial branch, simultaneously destroys or prohibits the continued existence of a private enterprise and establishes a state monopoly in the same area. The question is whether this regulation is legitimate and whether it does not constitute a compulsory acquisition of (some of) the property in question, in which case the action would either require compensation or be unconstitutional and invalid. A good example of this kind of situation appears from the widely cited Malaysian case of Government of Malaysia & Another v Selangor Pilot Association. The respondents provided private pilotage services and had an effective monopoly on the business in certain pilotage districts. The Port Authorities (Amendment) Act 1972 prohibited the respondents from carrying on their business within the relevant pilotage districts. The physical assets of the respondents were sold voluntarily to the second appellant, who paid compensation for them to the respondents. The respondents asked for additional compensation for loss of future profits and loss of goodwill, but this was denied. They then applied for a declaration that they were entitled to compensation for loss of goodwill, and in the alternative that the relevant section in the Act was unconstitutional as it was in conflict with section 13 (the property guarantee) of the Federal Constitution of Malaysia 1957. The High Court dismissed the action and the pilots= association appealed to the Federal Court, which allowed the appeal. The government then appealed to the Privy Council. The question was, firstly, whether the licences of the plaintiffs and their right to employ pilots, or alternatively the goodwill of their business, could be regarded as property for purposes of section 13; and, secondly, whether any part of that property was acquired by the state. Even if the licences or the goodwill were regarded as property, the Privy Council was not willing to accept that it was acquired by the state as a result of the legislation in question. The Privy Council agreed that a person might be deprived of property by a >mere negative or restrictive provision=, but that does not necessarily imply that the deprivation also results in a compulsory acquisition or use. The term >compulsory acquisition or use= in section 13(2) was, therefore, interpreted strictly, which means that the state should not merely deprive the plaintiff of property but also acquire or use it. This means that the Privy Council recognised, for purposes of section 13 of the Constitution, the existence of deprivations of private property that completely destroy the affected person=s property but still do not amount to compulsory acquisitions or use of such property by the state. This is in line with the constitutional provision that, while all deprivations of private property must be in accordance with a law, only those deprivations which also involve the compulsory acquisitions or use of the property by the state need to be compensated. Lord Salmon, in a dissenting judgment, agreed that the licences did not constitute property, but in his view the property which the pilots had in the business (the goodwill) was indirectly acquired through the legislation, and therefore compensation should have been paid. Lord Salmon=s dissenting judgment was based on the same premises as the majority decision, but he argued that the effect of the law in question was that the plaintiff=s goodwill was actually acquired by the state, which means that compensation had to be paid for that part of the property that was not merely destroyed by the regulation but actually taken over by the state. The same argument was used in the Canadian case of Manitoba Fisheries Ltd v The Queen. The plaintiffs were the owners of a private fish-exporting business until 1969, when the Fresh Water Fish Marketing Act 1970 was promulgated. This Act gave a statutory corporation an effective monopoly on the business of exporting fish, except if the corporation were to grant a licence to or exempt anyone from the prohibition on continuing their business. No licences were issued and no exemptions made. The Act provided for payment of compensation, but no compensation was paid to the plaintiffs. The plaintiffs claimed compensation for the loss of their business, including loss of goodwill. The decision was based on the distinction between a >mere= deprivation and a so-called >regulatory taking=, and the Canadian court referred to the Malaysian decision in Government of Malaysia v Selangor Pilot Association for authority on this point. However, the Canadian court distinguished the decision of the Privy Council in Selangor Pilot Association, and decided that the Act did effect an expropriation, because it did not merely regulate the conditions under which the plaintiffs might continue their business, but actually deprived them of it and effectively transferred their business to the statutory corporation. This is an expropriation and not a regulation, even if the law was intended to function as a regulation. The comparison between the Canadian Manitoba decision and the Malaysian Selangor decision raises the question whether it is necessary that intangible commercial property must actually be acquired or used by the state to constitute a taking. The Canadian court was satisfied that the property in question (the goodwill) was actually taken or acquired by the state, because the plaintiff=s customers were actually forced to trade with the state corporation, which suggests that there might be a taking if the state somehow acquires or uses the property, for example by acquiring the benefit of the former private enterprises= goodwill. Lord Salmond=s dissenting judgment in Selangor Pilot Association suggests that the same might have been true in that case, which would mean that the majority decision in Selangor Pilot Association was wrong. The implication seems to be that a regulation should be regarded as a compulsory acquisition (and compensated) when its effect is not merely to control (which may include closing down) private enterprises, but actually to take over their business for the benefit of the state (through the creation of a state monopoly). On the other hand, a regulation that does not amount to a taking over of the business should not be regarded as a compulsory acquisition merely because it resulted in the closing down of a private enterprise: there is probably room for the possibility that truly (and legitimate) regulatory measures can close down a commercial enterprise, for a valid public purpose, without acquiring the business or benefiting from its closing down in any way. In such a case there could be no question of compensation. Partial support for this position is provided by the Mauritian case of Societe United Docks and Others v Government of Mauritius; Marine Workers Union and Others v Mauritius Marine Authority and Others. The appellant companies were engaged in the business of storing and loading sugar for export by means of manual labour by dockers and stevedores. New developments changed the method of loading sugar from the manual loading of bags to mechanised bulk loading. Following this development, the Mauritius Sugar Terminal Corporation Act 1979 established the Mauritius Sugar Terminal Corporation, which had a monopoly on the storing and loading of sugar for export (except insofar as the Minister might authorise other persons to do so). As a result of the implementation of this Act, the appellants= business became redundant. The Act makes provision for compensation to be paid to the employees of the affected companies, but not to the companies themselves. The appellant companies instituted proceedings claiming compensation on the grounds that the Act amounted to a compulsory acquisition of their property in their businesses, without compensation, in conflict with the property clause in sections 3(c) and 8 of the Constitution of Mauritius. The Privy Council refused to award compensation. A strong indication that the relevant statute (and even of the establishment of a state monopoly) in this case was actually supposed to regulate and control the sugar industry and not to take over the business of private enterprises appears from the fact that the government of Mauritius was protecting its main source of commerce, the sugar industry, by promoting technological progress in the establishment of a new loading facility. In principle, this could mean that the regulation in question should be regarded as a >proper= exercise of the police power, with the result that any deprivation of property resulting from it does not require compensation. However, the situation is slightly more complicated than it seems at first sight, and at least two further questions remain. Firstly, the fact that the Mauritian government was clearly exercising its police power in this case does not necessarily mean, as the Privy Council seems to have thought, that its actions cannot attract a compensation award. The mere fact that the state clearly exercises its police power in a legitimate situation and for the public interest does not dispose of the matter completely: the question remains whether the promotion of technological progress also requires the state to get involved in the business as a competitor, especially by way of setting up a state monopoly. This question involves the distinction between the various roles of the state as regulator and as competitor in business: as soon as the state assumes the role of competitor (for instance by establishing a state monopoly) the >purely= regulatory nature of its exercise of the police power is placed in question. In Societe United Docks, the fact that the state went beyond regulation of the sugar industry and set up a state monopoly could mean that it crossed the line from a regulation to a compulsory acquisition. However, this result is not necessarily the only explanation, and Allen offers an alternative perspective on the facts. In his view, the decision implies that a company that wishes to claim compensation for loss as a result of state action which destroyed the business in question needs to prove that (a) it was subject to a coercive action, and (b) that the coercive action was the actual cause of the owner=s loss. Although coercive action was present in the form of the statute which created the state monopoly, this monopoly was not the effective cause of the appellants= loss. The loss was caused by the technological advance in the storage and loading industry, and the appellants would have been unable to compete with the new bulk loading terminal even in the absence of a statutory monopoly. This means, in Allen=s view, that the establishment of the state monopoly does not automatically point towards a compulsory acquisition and compensation. While this approach has the advantage, in Allen=s judgment, of being clear and certain (and it does present the facts in an interesting contextual perspective), it leaves the state free to attack rights indirectly where a direct attack would have been unconstitutional. However, even though Allen=s criticism of the decision seems reasonable, he (like the Privy Council) fails to take into account a second major factor that influences the situation in the Mauritian case. Both the Privy Council=s decision and Allen=s discussion of the Societe United Docks case fail to pay sufficient attention to the fact that the Mauritian property clause is different from, for example, the Malaysian property clause in one essential aspect: being a >standard= variation of the >double= property clause found in a number of postcolonial constitutions, it requires compensation for both compulsory acquisitions and deprivations of property. So, even if the court should decide that the regulation in question constituted a deprivation of property in terms of the police power and not a compulsory acquisition, it is still possible that section 3 of the Mauritian Constitution could require compensation for that deprivation. This is due to a structural and phraseological quirk of some postcolonial constitutions and should not be seen as a fundamental problem that undermines the general conclusions of this part of the article, namely that the destruction of a private enterprise, combined with the creation of a state monopoly, might indicate that the state acquired certain property from the private enterprise in the process. The possible conclusion that the closing down of the enterprise in this case could be regarded as a deprivation of property rather than a compulsory acquisition of property does not, in other words, exclude the further possibility that compensation might nevertheless have been required in terms of the Mauritian Constitution. The question whether the closing down of the private sugar loading businesses amounted to a deprivation or a compulsory acquisition had to be answered with reference to other considerations, such as the fact that the state monopoly acquired benefit from the closing down of the private enterprises and that the technological advances promoted by the Act rendered the private enterprises redundant regardless of any benefit to the state monopoly. In the final analysis, this is a judgment call that has to be made with full recognition of the unique facts and circumstances of the case. The same is true of the decision of the Indian Supreme Court in Saghir Ahmad v The State of Uttar Pradesh and Others. The appellant was a private entrepreneur who provided transport on the Bulandshahr-Delhi route. Section 42(3) of the Motor Vehicles Act 1939 exempted government-owned transport vehicles from the requirement of obtaining permits. The government of the state of Uttar Pradesh decided to operate their own buses on the public thoroughfares as competitors with the private operators. They later decided to exclude all private bus owners and create a state monopoly on road transport. To this end, the transport authorities began cancelling the permits issued to private bus owners and refusing new permits to private operators. Several private bus owners instituted proceedings complaining of the illegal use by the government of Uttar Pradesh of the provisions of the Motor Vehicles Act 1939. The court held that it was not possible to nationalise an industry without appropriate legislation which would have to be justified under article 19(6) of the Constitution. The state government promulgated the Uttar Pradesh Road Transport Act 2 of 1951, authorising the creation of a state monopoly on road transport services where the state is satisfied that this would be in the public interest. The state issued a notification under this Act to the effect that road transport services on the Bulandshahr-Delhi route, among others, were to be operated exclusively by the state government. The constitutionality of the Act was challenged, inter alia on the ground that it amounted to an uncompensated acquisition of the appellant=s interest in a commercial undertaking, contrary to article 31(2) of the Constitution. The action was dismissed and the appellant appealed to the Supreme Court. The point raised for decision was whether the prohibition of a trade or business amounts to a deprivation of property in a commercial undertaking within the meaning of article 31(2) of the Constitution, and whether the absence of provision for compensation meant that the Uttar Pradesh Road Transport Act 2 of 1951 was unconstitutional. The High Court decided that the mere prohibition of the business ventures in question did not amount to a compensable acquisition in terms of article 31(2), because no property was taken over by the state, although it was clear that the prohibition was aimed at instituting a state monopoly. With reference to the majority decision in State of West Bengal v Subodh Gopal Bose the Supreme Court overturned this decision, and held that the effect of the law was to deprive the plaintiffs of their interests in the business venture, and that the absence of provision for compensation rendered the law unconstitutional for being in conflict with the property clause in article 31(2). The general trend in decisions in this category seems to be that a regulatory control measure does not necessarily constitute a compulsory acquisition of commercial property and require compensation simply because it destroys or prohibits the continued existence of a private business enterprise; but on the other hand the simultaneous destruction or prohibition of a private enterprise and establishment of a competing state monopoly could be an indication that at least part of the private property (such as the goodwill of the enterprise) was taken over by the state and should be compensated. 5. Regulatory interference with the management of business enterprises In some instances, the regulation of commercial property also interferes with a private commercial enterprise in a manner that seems to threaten its continued existence, but without setting up a state monopoly or competing state enterprise. The relatively obvious >taking-over= element that pointed in the direction of a compulsory acquisition in the previous category is therefore absent in this case, and claims that a regulation of this nature constitutes a taking is restricted to arguments based on its extreme nature or on the harshness of its effects for the affected property owners. The cases discussed below have been selected because of their common feature that the property owner=s right to manage the property was taken over or substantially interfered with in each case. To distinguish this category from the next one, cases dealing with licences, permits and quotas are not considered here. A decision of the Grand Bench of the Supreme Court of Japan illustrates the importance of the right to manage a business in the context of constitutional property. In November 1946 the workers in a metal factory went on a >production control= strike, which means that the workers took over the management of the factory and continued with production. In December 1946 the workers sold steel plate belonging to the company in order to obtain money to cover operating expenses and to pay the workers= wages, and subsequently the leaders of the strike were charged with and convicted of theft of company property and were sentenced to six months= imprisonment. Their appeal against this conviction was unsuccessful and they proceeded with their case in the Supreme Court. The Supreme Court confirmed that the property rights of employers are not absolute, and that they are limited inter alia to accommodate labour rights, but on the other hand it is >not permissible= to >oppress the free will of the employer and to obstruct his control over his property=. In the final analysis the management, administration, supervision and direction of an enterprise (the property) remain in the hands of the owner, even though the rights of labour have to be and are recognised and protected. The rights of labour include the right to strike, and this right >also produces an infringement on the right to property=, but that is still different from taking over the management of the property itself from the owner. The court therefore upheld the management rights of the property holder against the (recognised) labour rights of labourers. This gives an indication that the right to manage is considered an important aspect of property in commercial enterprises. Two decisions of the Indian Supreme Court deal with the almost exactly opposite situation under comparable circumstances: in these cases, the state took over the management of private companies to ensure continued production. In Charanjit Lal Chowdhury v The Union of India and Others, the applicant was a shareholder in one of the principal producers of cotton textiles. Due to labour disputes between employees and management, the mills were temporarily closed in 1949 and production was ceased. In order to ensure continued production of an essential commodity and to prevent serious unemployment, the Governor-General intervened, promulgating the Sholapur Spinning and Weaving Company (Emergency Provisions) Ordinance 2 of 1950, which authorised the government to take over the management of the company. The government of Bombay exercised these powers by appointing directors to manage and administer the property and affairs of the company. The ordinance was later replaced by the Sholapur Spinning and Weaving Company (Emergency Provisions) Act 28 of 1950, which contained similar provisions. The applicant contended that the effect of the Act was to take possession of property and other interests in the undertaking away from the shareholders and the company and vest them in persons appointed by the state. The applicant alleged that the taking of property was uncompensated and not for a public purpose and therefore violated the property clause in article 31 of the Constitution. The majority of the Supreme Court dismissed the application. The main arguments for this decision are set out in the judgment of Mukherjea J, who restricted the scope of the investigation by arguing that the petition should have been brought by the company itself if it concerned the property of the company, and that the court in the present case could merely ask whether the law in question infringed the individual applicant=s property (as opposed to the company=s property). Furthermore, Mukherjea J argued that the question of expropriation should be narrowed down to the question whether the state took possession of the petitioner=s property, since it was clear that it could not be said that his property (in the sense of >the whole bundle= of his rights) was taken over and passed to the state, leaving nothing vested in the petitioner. On this basis, it could not be said that the petitioner was dispossessed of his shares, even though some of his rights as shareholder had been restricted. Mukherjea J was not convinced that the law in question constituted an improper discrimination against the petitioner either. Patanjali Sastri J and Das J were of the opinion that the petition should have succeeded, because they thought that the law in question constituted an improper discrimination against one specific company. Das J concurred with the majority that the acquisition issue had to be decided with reference to the applicant=s property, in other words the shares, and not the company as such. In this perspective he concluded that the law in question did not amount to an acquisition of the petitioner=s property: a law deprives someone of his property when it takes away >the substantial bulk of the rights constituting his "property"=, but in this case the rights which the petitioner retained were >the most important of the rights constituting his "property"=, even though some of his rights were undeniably taken away. Das J therefore concluded that the petitioner=s rights were not taken away as meant in article 31 or article 19, and that the >curtailment of the incidental privileges, namely, the right to elect directors, to pass resolutions and to apply for the winding up may well be supported as a reasonable restraint on the exercise and enjoyment of the shareholder=s right of property imposed in the interests of the general public ...=, in other words, as a regulatory non-compensable deprivation. The rights that were taken away or restricted were described as >privileges incidental to the ownership of the share which itself is property=, but in themselves and on their own they do not constitute property. The view taken in this case was coloured by the fact that the applicant was a shareholder in the affected company and not the company itself, and the ratio of the decision is therefore that the state=s interference with the management of the company did not take over any property from the shareholders as such. A different position was assumed in Dwarkadas Shrinivas v The Sholapur Spinning and Weaving Co Ltd and Others, which dealt with the same Sholapur Spinning and Weaving Company (Emergency Provisions) Ordinance 2 of 1950 and Sholapur Spinning and Weaving Company (Emergency Provisions) Act 28 of 1950. In this case, the new directors appointed in terms of the Act passed a resolution making a contribution call for a certain amount on each preferent share, payable on a certain date. The applicant instituted an action on behalf of himself and all other preferent shareholders, challenging the validity of the ordinance on the grounds that it violated section 299(2) of the Government of India Act 1935. The action was dismissed and this decision was confirmed by the High Court on appeal. The applicant appealed to the Supreme Court on the grounds that the provisions of the ordinance authorising the taking over of the management and administration of the company were contrary to article 31(2) of the Constitution of India 1950. In this case Das J concluded that a law which transfers management of a company to the state >has far overstepped the limits of police power and is, in substance, nothing short of expropriation by way of the exercise of the power of eminent domain=, even though neither the shares of the shareholders nor the actual property of the company was acquired by the state. Bose J agreed that property includes any interest in any commercial and industrial undertaking, as well as any interest in a company with an interest in a commercial or industrial undertaking, which means that the law in question did acquire property for purposes of article 31(2) by taking over the management of the company. The decisions in these two Indian cases seem somewhat inconsistent, considering that the applicant in Dwarkadas Shrinivas was also an individual shareholder and not the company itself, so that there was no obvious reason to depart from the restricted approach in Charanjit Lal Chowdhury and decide this case with reference to the property of the company as such. The inconsistencies must, however, probably be seen as a result of a constitutional wrangle between the courts and the legislature about the interpretation of the property clause and a consequent difference of opinion between some of the judges (particularly Sastri J and Das J) about the relationship between articles 19 and 31, and between articles 31(1) and 31(2). The decision in the influential case of State of West Bengal v Subodh Gopal Bose and Others, in which the Supreme Court set out the Sastri vision of the structure, meaning and scope of the property guarantee contained in articles 19(1)(f) and 31, and which was followed by the majority in Dwarkadas Shrinivas, tended to restrict the power of the state to introduce non-compensable regulatory limitations of property while increasing the scope of compensable deprivations of property. The result was that the right to manage commercial property was considered such an important aspect of the property that a material interference with that right by the state was regarded as a compulsory acquisition of the property. However, this result (and the different approaches of particularly Das J in Dwarkadas Shrinivas and Charanjit Lal Chowdhury) cannot be explained exclusively in terms of the reactionary mood of the Sastri court. Even before this development took place Das J was already willing to recognise the importance of the right to manage property and to protect it against state interference. In Kameshwar Singh v Province of Bihar the Supreme Court had to decide on the constitutional validity of the Bihar State Management of Estates and Tenures Act 21 of 1949, which provided that the management of certain estates and tenures in land would be placed in the hands of civil servants for a certain period of time. Shearer J (for the majority) concluded that the law does not take away rights in property, but merely restricts powers incident to ownership. However, in this case Das J thought that the law did indeed amount to an acquisition of property, because >certain very important rights of, and incidental to ownership are taken away ...=. Even though >the entire bundle of rights of a proprietor or tenure holder= was not taken away, the fact that several rights in land were in fact acquired was sufficient to qualify the Act in question as acquisitive. There is, therefore, a certain measure of inconsistency in the various opinions of Das J on the question whether state interference with the management of a private company amounts to an expropriation of the property or not. These inconsistencies are due partly to the courts= constitutional wrangle with the legislature and partly to different features and contexts of the various cases involved. It should not detract from the general impression that, in the view of the Indian courts, state interference with the management of a private company can be (and more often than not is) so serious an infringement of the owners= rights that it amounts to an expropriation rather than a regulation, even if it is recognised that the intention was to protect a legitimate and important aspect of the public interest. Three cases that concerned the complete or partial nationalisation of private banks also illustrate the constitutional importance of the right to manage a private business enterprise. In RC Cooper v Union of India (Bank Nationalisation case) the Indian Supreme Court had the opportunity to consider the validity of a 1968 amendment of the Banking Companies Act 1949 that was intended to give effect to the policy of social control over commercial banks. In July 1969, an ordinance transferred the undertaking of 14 commercial banks to 14 new banks established under the ordinance. The post of chairperson and director of each bank was deemed to have been vacated. Provision was made for the payment of compensation to the named banks. The ordinance was replaced by the Banking Companies (Acquisition and Transfer of Undertaking) Act 22 of 1969, the declared aim of which was to serve the needs of the development of the economy in accordance with national policy and objectives, and which provided for the taking over of the affected banks= banking business, but left their non-banking business to be carried out within certain restrictions. The petitioner was a shareholder in several banks and had accounts with those banks. He was also a director of the Central Bank of India. He challenged the validity of the ordinance and the Act on the ground that it infringed his fundamental rights under articles 19(1)(f) and 31(2) of the Constitution. The majority of the court declared the Banking Companies (Acquisition and Transfer of Undertakings) Act 22 of 1969 unconstitutional and void. In reaching this judgment the court followed the reasoning of the decisions in Kochuni v States of Madras and Kerala and Vajravelu Mudaliar v The Special Deputy Collector for Land Acquisition, West Madras and Another: a law may only deprive a person of property without compensation if it does not impair the fundamental rights as such; articles 19 and 31 must be read together and not disjunctively; the validity of the state action in acquiring or restricting property rights must be determined in the light of its effects on the right, and not just with reference to the object of the law in question or the power of the state; because articles 19 and 31 have to be read together, the fact that an acquisition of property is for a public purpose creates a presumption of reasonableness, but that does not preclude an investigation into the reasonableness of the procedural provisions; accordingly, an acquisition of property is tested not only against the requirements of article 31(2) but also against the requirements of article 19. In view of this line of argument, the court investigated the Act, and decided that it would not pronounce on or investigate the advisability of taking over the banks, but it could and did investigate the effect of the provisions on the rights of those affected by the takeover. The restrictions imposed on the carrying on of the non-banking business were found to be so stringent that the business could not in practice be carried on, and were therefore unreasonable. In following the Vajravelu decision the court considered itself justified in asking whether the compensation provided for or the principles laid down for its determination were relevant. In this case the principles were irrelevant, because they were aimed at the acquisition of and compensation for the whole business concern, but in fact related to the value of certain of its assets only. The Act was, therefore, declared void in its entirety. Attorney-General v Lawrence was decided in terms of the old Constitution of St Christopher, Nevis and Anguilla 1967, prior to promulgation of the Constitution of Saint Christopher and Nevis 1983. The St. Kitts/Nevis/Anguilla National Bank Ltd (Special Provisions) Act 1982 was promulgated to remove the directors of the bank from office and to install a new management. The respondent claimed that the Act constituted a contravention of section 6 of the Constitution, which protects property rights. The court held that section 6, which refers to >any interest in or right over property of any description=, applies equally to >concrete as well as abstract right[s] of property=, and that management is an important incident of holding property for this purpose and is therefore also covered by section 6. Given the fact that the relevant property clause is a >standard= variation of a >double= property guarantee, it is important to keep in mind that compensation is also provided for deprivation of property, which complicates matters somewhat. However, as in the Mauritian case of Societe United Docks and Others v Government of Mauritius; Marine Workers Union and Others v Mauritius Marine Authority and Others, it is possible to argue that even >standard= >double= property guarantees leave room for regulatory deprivations that do not require compensation, and consequently the award of compensation in this case probably indicates the courts= opinion that the regulation in question actually amounted to an expropriation, just as much as the decision in Societe United Docks indicated an opinion that the regulation in that case did not. Bank of New South Wales v The Commonwealth concerned the Australian Banking Act 1947, which provided for the acquisition of shares in any private bank by the Commonwealth Bank by agreement or compulsion, the taking over of any business in Australia of any of the banks by the Commonwealth Bank by agreement or compulsion, the payment of compensation as determined by a Court of Claims and the prohibition of the carrying on of banking by the private banks upon notice given by the Treasurer. If put into full operation, the Act would have had the effect of creating a monopoly of banking in Australia in favour of the Commonwealth Bank of Australia. The plaintiffs challenged the validity of the Act on the grounds that it did not fall within the powers of parliament under section 51 of the Commonwealth Constitution 1900. The majority decision in this case followed the majority in Minister of State for the Army v Dalziel in refusing to restrict the concept of an acquisition, for purposes of section 51(xxxi), to the acquisition of full title, and in applying the requirement of just terms to compulsory acquisitions of >innominate and anomalous interests and [...] the assumption and indefinite continuance of exclusive possession and control for the purposes of the Commonwealth of any subject of property=. The provisions of the Banking Act 1947 were held to be in conflict with the constitutional guarantee, because they amounted to a scheme for the compulsory acquisition of property, but failed to provide just terms as required by section 51(xxxi). Important considerations in coming to this conclusion were that the scheme should not be allowed to effect a compulsory taking of the property by indirect means; that the empty husk which remains of the corporate shell of the private banks means nothing, and that the banks as such are in fact being acquired by the Act B >[t]he company and its shareholders are in a real sense, although not formally, stripped of the possession and control of the entire undertaking=; that the acquisition of property cannot change the nature of the property involved (shares and assets respectively), and the interest which the Commonwealth Bank would acquire is anomalous, unknown to law and equity; and that the effect of the Act would be that the state would be in a position to act as judge in its own cause in determining the compensation. A different and extremely interesting perspective appears from the decision of the German Federal Constitutional Court in the Contergan case, where it was decided that there are situations where the state has the power to interfere with the right to manage private property, without such interference amounting to an expropriation of the property. In terms of a settlement agreement between the victims and the producer of the medicine that caused the physical handicaps of the German Thalidomide victims, a private compensation fund was created, and each victim who was a party to the settlement agreement acquired a claim right against the fund. The federal government promulgated a law to create a public foundation to manage the compensation fund, supported by further state funds, for the benefit of all the Contergan victims. For all practical purposes this meant that the fund was nationalised, or at least placed under state management. The question posed by the complainants is whether the federal law was valid, and how it affected the rights of those victims who were opposed to the creation of the foundation. According to the complainants, the law infringed upon their property rights by taking away the rights they derived from the agreement with the company, and imposed a bureaucracy upon them which interfered with their right to manage their own private property interests in the fund as guaranteed by the Constitution. The effect of the Act was that the victims= private-law rights (deriving from the settlement agreement) in the compensation fund were replaced by public-law rights (deriving from legislation) in the foundation=s funds. It was obvious that the original claims against the private fund would be reduced substantially by the fact that the new, public fund was open to claims from victims who were not parties to the settlement agreement. The most important change was that the rights in question were removed from the private sphere and subjected to the management of a specially created public-law body. The question whether the complainants= constitutionally guaranteed property rights were infringed has to be answered against this background. The court accepted that the complainants= claims against the compensation fund in terms of the agreement were protected by the constitutional property guarantee: money debts can be regarded as property for purposes of the property clause, especially when those debts and the claims deriving from them served the purpose to replace a loss of physical capabilities, and the property guarantee has to secure these debts and claims for the complainants in the same way as it does for all other protected property. The question was how the effect of the management law of 1971 should be explained. The court argued as follows: the law transformed and changed the nature of these constitutionally guaranteed claims; the main question is whether the legislature was prevented by the Basic Law from doing so, and whether the law remained within the limits of what is allowed for such legislation; the substantive guarantee (Bestandsgarantie) in article 14.1 secures the right of a property holder to a specific, concrete property object, but does not make that property completely untouchable, nor does it exclude every possibility of affecting or changing it by law; on the contrary, article 14.2 allows and actually charges the legislature to restrict and give content to those rights, although this power has to be exercised within clear limits; this power to determine the content and limits of property rights gives the legislature the right to realise the social function of the property in question, depending on how strong or how weak the social function is; in the process a just balance between the autonomous sphere of freedom of the individual and the social interests of the community has to be found in view of the principle of proportionality; and even when a strong social interest justifies a regulatory limitation of the individual=s autonomy, not every kind of limitation is justified, and the limitation has to be proportionate and has to respect the substance of the right. In view of these principles the creation of the public foundation has to be seen as a justified and legitimate regulatory provision, aimed at securing the social interest in the proper and just distribution and management of the compensation fund and the additional state funds. The law does not constitute an expropriation of the complainants= original claims against the compensation fund, but simply transforms these claims into public-law claims against the foundation funds. An important consideration in this regard is the fact that the compensation fund was not meant to satisfy only the complainants= claims against the company, but all possible claims deriving from the use of the relevant medicine. To ensure the just distribution of the fund under these circumstances, where new claimants might still come forward, it was unavoidable to manage the funds through a public foundation. The German Federal Constitutional Court assumed a similar position in the so-called Mitbestimmung case. The question in this case was whether a law which provided for compulsory participation of employees in the management of large concerns was constitutional. The complainants, owners of a number of private and incorporated companies affected by the law, claimed that their property rights were infringed by the provisions in question. The Federal Constitutional Court decided that the law did not conflict with the property guarantee in article 14 of the German Basic Law. The court reiterated its position that, as far as the function of property in securing the personal freedom of the individual is at stake, property enjoys a particularly strong protection; but the stronger the social relation and function of property, the stronger and the wider are the regulatory powers of the legislature in determining the content and limits of that property B this principle is based on the fact that the use of property with a strong social function affects not only the property holder but also other people=s lives and interests. The statutory provisions with regard to the participation of employees in the management decisions of large enterprises are regulatory determinations of the content and limits of the property rights of the owners and shareholders of the businesses involved, and not expropriations. In judging the legitimacy and justification of these regulatory provisions, the nature and social function of this kind of investment property has to be taken into account: it clearly has little direct bearing on the provision or security of the individual shareholder=s personal freedom, and it equally clearly has a very significant social function in that the use and exploitation of this kind of property affect the lives of many other people, particularly the employees of the company. Therefore, in terms of the principles that govern the interpretation and application of the property clause, the scope for legislative regulatory limitations of this kind of property is wide, although the substance of the property may not be destroyed. The specific provisions under review in this case were regarded, in view of the proportionality principle, as legitimate and justifiable restrictions of property. To arrive at this conclusion the court undertook a quite detailed investigation of the function and social effects of investment property. These two German decisions suggest that not all state interferences with the right to manage private (commercial) property will amount to expropriations, not even when the interference is drastic and results in losses for those affected. In other words, it appears that it will be justified under certain circumstances for the state to interfere with or even take over the right to manage private (commercial) property when such a step is justified by the state=s police power duty to protect an important aspect of the public interest. A similar perspective appears from the decision of the US Supreme Court in PruneYard Shopping Center v Robins. The private owner of a shopping centre appealed from a judgment of the California Supreme Court in which it was held that the California Constitution protects free speech and petitioning, reasonably exercised, in a privately owned shopping centre. The owner of the shopping centre claimed that the decision of the United States Supreme Court in Lloyd v Tanner prevented the state from requiring a private shopping centre owner to allow access to people exercising their constitutional rights of free speech and petition when adequate alternative avenues of communication are available to them. The question was whether the states are precluded from promulgating legislation (such as a state constitution) which requires a private shopping centre owner to allow access to people who want to exercise their rights of free speech and petition in the shopping centre. Rehnquist J for the majority made it clear from the outset that the reasoning of the court in Lloyd v Tanner did not limit the authority of the states to exercise their police power or their sovereign right to adopt their own constitutions in which individual liberties may be more expansive than in the federal Constitution. The states may exercise their police power in such a way that reasonable restrictions are imposed on private property, provided the restrictions do not amount to a taking of the property without just compensation or contravene any other federal constitutional provision. The effect of Lloyd v Tanner, according to Rehnquist J, was that when a private landowner opens a shopping mall to the public, the First Amendment does not create individual rights in expression beyond those already existing under applicable law. Rehnquist J confirmed that the right to exclude others from property (an important aspect of the owner=s right to manage the property) is regarded as one of the essential sticks in the bundle making up property, and that the interpretation of the California Supreme Court indeed destroyed this right by allowing free expression rights to the public on the premises of a privately owned shopping centre. However, and this is the important point, he added that not every destruction of or injury to property by governmental action amounts to a taking in the constitutional sense. To determine whether there was a violation of the takings clause, the question that had to be asked was whether the restriction on private property >forces some people to bear alone public burdens which, in all fairness and justice, should be borne by the public as a whole=. This entails considerations of factors such as the nature and economic impact of the regulation and its interference with reasonable investment-backed expectations. When the regulation goes too far, it will be recognised as a taking. In the circumstances of the case, so Rehnquist J argued, there was nothing to indicate that the requirement to allow the petitioners to exercise their state-protected rights of free speech and petition in the shopping centre would amount to an unconstitutional infringement of the owner=s property rights under the takings clause. It was clear that the property owner did not have to suffer expressive activity under a blanket permission, and it was free to adopt and enforce regulations with regard to the time, place and manner in which these activities would be permissible so as to minimise interference with the regular activities of a shopping centre. In this perspective the actions of the petitioners could not be described as a physical invasion of the property. In fact, the point was that the property owner failed in this case to demonstrate that the right to exclude others from the premises was so essential to the use or economic value of the property that the state-allowed limitation amounted to a taking of the property. Accordingly, the claim based on the takings clause failed. The claim based on due process was also rejected. Due process, it was pointed out, demands only that the state action should not be unreasonable, arbitrary or capricious, and that the means selected to serve the public purpose should have a real and substantial relation to the objective served by it. There was no proof in the present case that the legislation complained of failed this test. In view of the analysis above it seems that the right to manage (especially commercial) property is considered a sufficiently important aspect of property that a substantial interference with that right by the state may well establish a compulsory acquisition of the property involved. However, there are enough cases that indicate that not every interference with the right to manage property is a compulsory acquisition: the nature and public purpose of the interference (which may even assume the form of the state taking over the management of the property) can justify the inference that the state imposed this limitation on the right as a legitimate and reasonable exercise, in the public interest, of its police power. 6. Regulation by way of licences, permits and quotas Regulation of commercial property by way of licences, permits and quotas gives rise to an especially important and interesting category of cases where it is often claimed that regulation has an expropriatory effect. These cases are distinguished from the ones discussed in earlier sections in that they do not involve the establishment of a state monopoly, and that they are not specifically concerned with the management of the relevant business. As a rule the most interesting cases originate in situations where a certain commercial branch or activity is subjected to (generally uncontroversial) regulation in the form of licences, permits or quotas, and the aggrieved party complains about the refusal, cancellation or amendment of a licence, permit or quota that is essential for the continued existence of her enterprise. In many cases the effect of the refusal or cancellation of a licence, permit or quota is that the business in question has to be closed down; in others an amendment of the licence, permit or quota or of the conditions under which it was issued or is held can render the business redundant or uncompetitive. Tre Trakt?rer AB v Sweden (Tre Trakt?rer AB Case) is a decision of the European Court of Human Rights, and deals with alcohol licencing in Sweden, a country with a long-standing policy aimed at the prevention of abuse of alcoholic beverages. This policy is embodied in the Act on the Sale of Beverages 1977, which regulates the serving of alcoholic beverages in restaurants and bars as well as the issuing of licences for these premises to sell alcohol. The applicant company=s licence to serve alcoholic beverages in a restaurant was subject to regulatory conditions regarding the character of a restaurant and the serving of young people. When the sole shareholder of the applicant company was audited and the audit revealed discrepancies in the bookkeeping relating to the sale of alcohol, criminal proceedings were instituted against her. She was acquitted, and after an admonition the relevant authority nevertheless renewed her licence. The Social Council appealed against this decision on the basis of an inspection report stating that the restaurant was overcrowded, that most of its customers were 18 years old and that an all-night discotheque was operated in part of the premises. The National Board of Health and Welfare decided to revoke the licence. The applicant company claimed compensation from the government on the ground that the revocation violated its rights under the Convention. This claim was rejected and the applicant company complained to the European Commission, which allowed the matter to be heard by the European Court of Human Rights. The European Court had no problem in recognising the economic interests connected with the management of the restaurant (including the licence to sell alcohol) as >possessions= for purposes of article 1 of the First Protocol to the European Convention on Human Rights, and accepted that withdrawal of the licence constituted an interference with the complainant=s right to the peaceful enjoyment of its possessions in terms of the first rule. The court decided that, severe though this interference may have been, it did not deprive the complainant of its property, but constituted a measure of control of the use of the property. The third rule (dealing with the regulation of the use of property) rather than the second rule (dealing with expropriation) therefore applied to this case. Regulatory control of the use of property has to comply with two requirements in terms of the third rule: it has to be lawful and in the public interest; and it has to satisfy the proportionality principle. With regard to the lawfulness requirement, the Court=s power to review compliance with domestic law is limited, and there was nothing in the present case to suggest that the withdrawal of the licence was contrary to Swedish law. With regard to the public interest requirement, the Court held that the interest served by the relevant law, namely control over the sale of alcohol was a legitimate action in the public interest. With regard to proportionality, the test is whether the measure of control strikes a fair balance between the general interest of the community and the protection of the individual=s property rights; and there must be a reasonable relationship of proportionality between the means employed and the aim sought to be realised, bearing in mind that the states enjoy a wide margin of appreciation in this regard. The court held that the burden imposed in this case, though heavy, was not disproportionate under the circumstances, and that the state did not fail to strike a fair balance between the public interest and the individual property interest. There was, consequently, no violation of article 1 and the Swedish law was upheld. Patricia Hand and Others v The Right Honourable Lord Mayor, Aldermen and Burgesses of Dublin and Others concerned a situation where renewal of a licence was denied because of criminal behaviour of the holder. Section 3 of the Irish Casual Trading Act 1980 requires a casual trading licence and a permit in order to engage in casual trading. The Act provides that a licence shall not be issued to anyone convicted of two or more offences under the Act. The plaintiffs had been convicted more than twice for offences under the Act, and when their applications for licences were denied, they claimed that the Act interfered with their right to earn a livelihood, which was said to be a property right in terms of the Irish Constitution. The court assumed, without deciding, that the right to earn a livelihood was a property right for purposes of the Constitution, but held that, even if the right to earn a livelihood was a property right, it could not be an unqualified right, and that it was subject to legitimate legal regulation. The regulations in this case were not considered an unjust attack on the plaintiffs= right to earn a livelihood. In Bahadur v Attorney-General the Court of Appeals of Trinidad and Tobago reached a similar result, albeit along a somewhat unusual route. The appellant was the owner and driver of a truck which was involved in a fatal accident. The appellant was charged with manslaughter and dangerous driving. The Licensing Authority then suspended the appellant=s driving permit in accordance with traffic laws, pending the determination of the charges against him. As the appellant=s livelihood was affected by the suspension of his driving permit, his solicitors wrote to the authorities several times asking that it be returned. The appellant was acquitted of the charges of manslaughter and dangerous driving, but his driving permit was only returned eight months later. The appellant approached the High Court for a declaration that the notice suspending his permit was null and void and in conflict with sections 4 and 5 of the Constitution. His application was dismissed and he appealed to the Court of Appeals. This decision provides an extensive discussion of the question whether a driving permit constitutes property for purposes of section 4(a) of the 1976 Constitution. The court subscribed to the generally accepted wide interpretation of this concept in constitutional cases, but nevertheless decided that a driving licence as such does not constitute property for this purpose. Of great importance in this regard is the additional qualification, which is particularly important in view of the fact that section 4 of the Constitution refers to the >enjoyment of property=, that even though the licence does not constitute >property= for purposes of section 4(a), the improper withdrawal of a driving licence may constitute an unconstitutional infringement of the >enjoyment of property=. The effect of the decision is, therefore, similar to that of the Tre Trakt?rer AB and Patricia Hand decisions discussed earlier. A number of cases deal with the acquisition of a licence, permit or quota and its effect on the viability of the business enterprise in question. The first case, Lawlor v Minister of Agriculture and Others, concerns the EEC Superlevy Regulations, which fixed an EEC limit for the production of milk and milk products and determined national milk quotas. The regulations provided that where land which was the subject of a quota was sold or leased as a whole or in part, the quota should be transferred and subdivided accordingly. The plaintiff sold one of his farms to the second and third defendants, who wanted to deliver their milk to a different co-operative, and a dispute arose as to the transfer of the plaintiff=s milk quota. The first defendant, the responsible Irish Minister, investigated and adjusted the various quotas allocated to the producers and co-operatives involved, and the plaintiff rejected these adjustments and the EEC regulations in terms of which they were made as an unfair attack on his property rights. The Irish court accepted that a milk quota is a valuable intangible asset, and that the quota regulations amount to a regulation or limitation of the use of farmland by individual producers, in an effort to reconcile such use with the exigencies of the common good. In what was described by the court as a teleological or schematic interpretation of the regulations, it was held that the purpose of the regulations was to ensure that quotas are allocated on the basis of milk production on given holdings throughout the basis year, so that any change in the ownership, subdivision or use of those holdings would be reflected in corresponding changes in the quota: the total quota for each holding in the basis year was to be allocated or subdivided between users of the total landholding in the same proportion as the use of the landholding itself. The court concluded that the regulations were not intended to abolish the right of private ownership or the general right to transfer, bequeath or inherit property, although they did limit the exercise of certain rights of ownership with a view to reconciling them with the exigencies of the common good. Furthermore, the court concluded that such a limitation of property rights did not require monetary compensation. In another Irish case, Hempenstall and Others v The Minister for the Environment, the question was whether an amendment of taxi regulations was valid. In terms of the Road Traffic (Public Service Vehicle) Regulations 1963 the minister created two classes of small public service vehicles, namely taxis and hackneys, the latter being somewhat more restricted in their operation in public places. In 1978 the number of taxi licences was restricted, and these licences were made transferable, thereby creating a market in them. In 1991, pending an investigation, the number of hackney licences was restricted temporarily, but in 1992 the moratorium was lifted. Subsequently, the applicants, a number of taxi operators, challenged the 1992 regulations, claiming that the unlimited issue of hackney licences constituted an unfair attack on their own taxi licences, these being valuable property rights. In this decision, it was assumed that taxi licences are indeed valuable property rights, and the only question was whether the regulations in question constituted an unjust attack on those rights. The court held that property rights originating in licences created by law are creatures of legislation, and that they are subject to changes in the relevant legislation and resulting diminution of those rights. The most important trend in this category seems to be that licences, permits and quotas either are or form part of commercial property, and are protected as such by a constitutional property clause. However, the property rights inherent in or deriving from these control mechanisms are regarded as creatures of legislation, and are therefore open to change and amendment by or in terms of the same legislation. Such changes, amendments and controls (which may include the refusal, revocal or restriction of the licence or the conditions under which it is held) are not necessarily to be regarded as expropriations of the property interest in them simply because the property in question is destroyed or rendered less valuable or uncompetitive. The tendency seems to be that regulations of this nature have to be imposed by law and have to comply with some sort of proportionality requirement, which means that the regulatory regime must impose a reasonable and justifiable limitation that is designed and likely to protect the public interest and that establishes a just balance between the public interest and the private interests that are affected. This is in line with the general proportionality tests applied in various jurisdictions to establish whether a particular limitation of a fundamental right is constitutionally justifiable. 7. Regulation of immaterial property rights The >police power= regulation of immaterial property rights (copyrights, patents, trademarks, and confidential information) can of course also result in losses to commercial enterprises, since these rights often have great commercial value, and in certain instances they can be essential to the operation or competitive edge of a business. However, this article is not concerned with the legal nature or with the constitutional protection of immaterial property rights as such. The position with the protection of existing immaterial property rights is not very problematic, and the principle is that an immaterial property right is regarded as property and protected accordingly in terms of the constitutional property clause if it is a vested right. A number of cases deal with the problems that arise when the regulation of immaterial property rights requires that information be made public by the holder of the right in such a manner that the right itself (or confidential information that is essential to it) is endangered. In Smith-Kline & French Laboratories (Australia) Ltd and Others v Secretary, Department of Community Services and Health; Alphapharm Pty Ltd v Secretary, Department of Community Services and Health and Others the Australian Federal Court was confrontedwith such a case. The applicants in the first proceedings were the holders of a patent with regard to cimetidine, a compound used for the treatment of ulcers and related disorders. The patent was due to expire and the first applicants filed for an extension of the patent, providing information regarding the chemistry and quality control of the cimetidine product to the Department of Community Services and Health. In 1987 the first applicants instituted proceedings seeking injunctive relief on the grounds that the respondent department intended to use this confidential information for purposes other than those for which it was given. They were granted interlocutory relief. The applicant in the second proceedings was an Australian company which opposed the extension of the applicants= patent on cimetidine and applied for marketing approval for its own brand of cimetidine. The respondent department informed the second applicant that it could not evaluate their application due to the interlocutory relief granted to the first applicants. The second applicant instituted proceedings for a declaration that the respondent department was free to use the information supplied by the first applicants in order to process its application and a mandamus that it should do so. The first applicants contended that if the applicable regulation had this effect, it would be a law for the acquisition of property other than on just terms within the meaning of section 51(xxxi) of the Australian Commonwealth Constitution 1900. The Federal Court decided that the concept of >property= in section 51(xxxi) must be defined widely, and that it includes innominate and intangible interests, in addition to the usual estates or interests in land, chattels and choses in actions known to common law and equity. It further held that the constitutional guarantee of just terms in section 51(xxxi) does not apply where the plaintiff supplies proprietary information to a state organ in order to obtain a permission or to have a prohibition lifted in terms of the regulations in question, because the regulations do not provide for a compulsory acquisition of the information in question. In a similar case, the German Federal Constitutional Court came to a comparable conclusion. A federal amendment law aimed at the simplification and improvement of the existing patent law and registration procedure implied that the documents submitted for the registration of a patent would, at a certain stage, become publicly accessible. This could obviously affect the proprietary interests of potential patent holders detrimentally, and The Federal Patents Court submitted the matter to the Federal Constitutional Court for a decision concerning the validity of these provisions, in view of the potential implications for already submitted and future applications for the registration of patents. In its judgment, the court set out the position of the applicant for and eventual holder of a registered patent: according to settled law, the applicant can acquire a protected interest in the object of the patent even before its registration, even if this interest does not yet constitute an exclusive right; this protected interest which is awarded to the applicant even before registration of the patent enjoys the protection of the property guarantee in article 14; the regulatory provisions of the law are aimed at facilitating and administering the registration procedure, and these provisions serve the purposes of determining the content and limits of the relevant rights as meant in article 14.1.2; as such, these provisions have to conform with the normal duty to establish a just balance between the interests of the holder of the right and the public interest, in conformity with the general principle of proportionality; the provisions in question, seen against the background of their purpose and of the existing measures and principles (which protect the applicant against improper and unlawful use of the information which becomes publicly accessible in this process), are not unreasonable or in conflict with the constitutional guarantee. An interesting aspect of the decision concerns the question of regulatory laws which change or amend an existing situation, thereby affecting existing rights. The court set out the general principles in this regard: in case of necessary changes or amendments to existing law, the legislature is not bound to a simple choice between leaving existing rights unaffected or expropriating them against compensation B existing rights can be amended or affected by changes in conformity with the constitutional property guarantee; that means that existing rights may be subjected to new, possibly more onerous restrictions and burdens; however, in this process the legislature is still bound by the requirements and restrictions imposed by the Basic Law; the legality or justifiability of amendments or changes to existing rights are explained in terms of the general principle that they must be justified by the public interest, with due consideration for the fundamental principle of proportionality. In view of all the circumstances, the rationalisation law in question satisfied this requirement, especially considering the fact that the applicant was not left without a remedy, should her rights unlawfully have been infringed upon. This last aspect, regarding the effects of a change in the regulatory regime that may affect existing rights, was illustrated nicely in another German decision, the Warenzeichen case. The case concerned a federal law aimed at rationalising and improving certain aspects of the wine industry. An aspect of the law was that wine labels could only display indications of the place of origin if the relevant place of origin was registered officially. However, estates or vineyards smaller than five hectares could not be registered. The complainant was the owner of a winery which has been marketing a quality wine from a small vineyard for many years, with a well-known label which indicated the place of origin of the wine in that specific vineyard. The new rules prevented her from continuing with the marketing of that wine, and her applications for an exception were denied. She alleged that her property rights had been infringed upon. In the course of its evaluation of the law, the Federal Constitutional Court set out the following principles regarding expropriation: the characteristic of expropriation in terms of article 14.3 is that the state authority interferes with concrete subjective rights which are guaranteed as property in terms of article 14.1; the question of an expropriation of the right to use indications of origin on a wine label can only arise in so far as that right qualifies as a property right in terms of article 14.1, which it generally does not; however, in cases (like the present one) where the right to use that indication as part of a trademark (Warenzeichen) was actually registered, the holder of the trademark acquired an independent property right in the use of that trademark, and that property right enjoyed the protection of article 14.1. In that sense the trademark was an important aspect and instrument of the holder=s business, and the constitutional court recognised the fact that property can also be protected by article 14.1 for its commercial value. The court held that the provision in question, in so far as it affected registered trademarks, was invalid because it conflicted with the constitutional property guarantee. The provisions were neither valid regulatory limitations of property (because they exceeded the limits of a legitimate determination of the content of the right in that they actually destroyed it completely) nor a legitimate expropriation (because they did not comply with the requirements for an expropriation in article 14.3). The validity of the provision in question could not be salvaged by means of a suitable compensation award either B according to the German Federal Constitutional Court, compensation is the result of a valid expropriation, and not a means of saving a disproportionate regulation. The general tendency illustrated by these cases seems to be that property rights consisting in or deriving from immaterial property such as patents, copyrights, trademarks and confidential information are included in the protection of the constitutional property guarantee, subject to the normal provisos regarding the state=s power to impose police power limitations, in the public interest, on the exercise of those rights. However, given the fact that these rights are normally recognised and protected in terms of a statutory regime, their constitutional protection against police power regulation has to be judged in a context similar to the position with regard to licences, permits and quotas: being (largely) creatures of legislation, the rights in question are subject to changes and amendments in the applicable laws. Regulatory regimes that impose (or introduce new) police power limitations on the use and exercise of immaterial property rights may and often will cause losses (complete loss of the right or loss in value) for the property holder without thereby necessarily being invalid or attracting compensation claims. The rule seems to be that all property rights are subject to the potentially detrimental effect of police power regulation, but property created by or protected in terms of a statutory regime (including immaterial property) may be even more susceptible to these effects than other property rights. 8. Concluding remarks and evaluation Of course there are many other cases that could have been considered here: the fairly extensive analysis above of 34 cases from 18 jurisdictions could have been extended a few times over. However, in my view the analysis suffices to illustrate a number of useful points about the police power regulation of intangible commercial property in terms of a constitutional property clause. I make no claims to methodological clarity or dogmatic certainty, but the following rather hesitant concluding remarks seem to justify the effort. Firstly, these case studies confirm the seemingly trite point that, for purposes of the constitutional property clause, the property concept is wide and flexible. This point is underlined by the very nature of the rights and interests that, in these cases, have been included under the protection of the property clause: claim to a money payment based on a court judgment or on contract; a financial or commercial interest in a company or in the goodwill of a business or in a bank; the right to manage a business enterprise; rights or interests in a business licence, permit or quota; and immaterial property rights such as copyright, patent, trademark or confidential information. Generally speaking, the proposition that constitutional property is a wider concept than private-law property is fairly trite and unproblematic, especially for public law specialists or for lawyers with a common-law background. It may sound strange or more problematic to some property lawyers from a civil-law background. But, to me, that is not really the point of these cases at all: what is really interesting is that the case studies above suggest that we look at the admittedly wide property concept of constitutional law from a slightly different angle, and recognise that the inclusion or exclusion of a certain right or interest from the protection of a constitutional property clause is a matter of context. In other words, the idea is not that the constitutional property concept is a wider one than the private-law concept, and that once we accept this basic point, the wider concept can be defined and circumscribed just as clearly and finally as the narrower one B the idea is that we should no longer focus on clearly described and defined concepts in our attempts to escape the hard and uncomfortable work of deciding cases on their merits. What is and is not property for purposes of the constitutional property guarantee is a judgment call, which means that we have to decide the matter, every time anew, with full recognition of the facts and the surrounding circumstances of each case. Of course there are guidelines and general trends that assist us in making the judgment, and in a sense this article is an attempt to identify such guidelines. However, as the cases illustrate so clearly, one simply cannot rely on the guidelines to make the judgment. The guidelines suggest that cancellation of a state debt should normally be regarded as an acquisitive and expropriatory rather than a regulatory police power action, because the state acquires the benefit of not having to pay a debt. However, as the Namibian Cultura 2000 case shows, there just may be cases where it is politically and morally justifiable for the state to repudiate a vested and acquired state debt B deciding when we are faced with such a case requires a careful evaluation of the facts and circumstances of each case, taking into account all kinds of difficult parameters such as the constitutional values enshrined in the Bill of Rights, the social, economic and political context in which the debt was created and in which it might be repudiated, the public interest in the case, the interests of those affected should the debt be repudiated, the possible social, political and economic effects and implications of either honouring or repudiating the debt, and so on and on and on. On the other hand, it is equally important to realise that a case that seems to justify the repudiation of a state debt along the lines of Cultura 2000 may be just slightly different from the Namibian case, requiring yet another judgment call on whether it might not be justified, in that particular case, to rather honour the debt. In many instances, the point of identifying guidelines and tendencies might not be to follow the guideline and simplify matters, but rather to avoid the mistake of following the guideline without realising that it is unsuitable. Perhaps we should only be identifying the tendencies in order to deviate from them. Similar conclusions can be drawn with reference to the cases above dealing with business licences and with immaterial property. In other words, the property issue in the constitutional context cannot simply be shrugged off with a dogmatic assumption that the concept is a wide one that includes a large number of intangible property interests: the question itself and the possible solutions, guidelines and tendencies that seem to offer or simplify the answers to it are contingent, contextual, continually changing. The dogmatic map that seeks to seduce us into believing that answers are not all that hard to find as long as one just follows the main routes of general principles and established precedent should be marked with the warning one finds on old maps of Africa: Hic leones sunt. As for the distinction between expropriation and deprivation and the various approaches to this conundrum, similarly uncomfortable conclusions are suggested by the case analysis above. The analysis of the Zimbabwean Hewlett and Davies cases illustrates the grave danger of an oversimplified inquiry based on the question whether the state acquired anything: in some instances, this question just does not make sense. This is not to say that it never makes sense, because Davies is a good example of a situation where it does: the effect of the relevant law in that case is easier to understand in terms of this question. It is in the context of other cases like Hewlett or Manitoba Fisheries or Selangor Pilot Association that this question leads us into dangerous territory. Even when working with a more sophisticated conceptual and dogmatic framework than is displayed by the logic of Hewlett, the factual and contextual complexities of cases like Selangor Pilot Association and Societe United Docks should serve as a warning that simplistic reasoning results in questionable decisions. Was the Canadian government merely rationalising the fishing industry, or was it actually establishing a state monopoly at the cost of the established private enterprises? Was the Mauritian government establishing a state monopoly at the cost of the private sugar-handling concerns, or was it simply protecting and promoting the efficiency of a key industry in the national interest? This question can only be answered with full recognition and consideration of the contextual factors mentioned earlier. A similar result is suggested with regard to another possible >bright-line= rule designed to simplify the difficult question of distinguishing between expropriations and regulatory deprivations. Rubenfeld suggested, with reference to the phraseology of the American Fifth Amendment, that the distinction should be made with reference to the question whether the property was actually >taken for public use=, and not simply whether the property was taken. This indicates that property may in certain instances be taken without it being >taken for public use=, so that a taking is either unconstitutional (if the public-use aspect is regarded mainly as a requirement for a valid taking) or does not require compensation (in a different reading, where the public-use aspect is read as a qualification of the compensation requirement) if it is not for public use. This reference to >public use= rather than the more general >public interest= is repeated in a few other property clauses, indicating that Rubenfeld=s reading of the Fifth Amendment has to be taken seriously if account is to be given of the textual differences between various property clauses. However, some problems deriving from a possibly dogmatic application of this suggestion are immediately apparent: is the strict >public-use= reading employed to subject expropriations to a stricter validity test, or is it used to limit the compensation requirement? The possible implications of the two approaches can be illustrated with reference to a situation where a constitution is supposed to protect existing property rights and to promote redistributory purposes like land reform. If a >public use= interpretation is employed to subject expropriations to a stricter requirement, it will mean that expropriation for the purpose of land redistribution is effectively blocked, because then it would be unconstitutional to expropriate from one private owner in order to give to another B use by another private owner would very possibly not qualify as >public use=. There are indications that redistributory expropriation should be valid if it clearly serves a public purpose, such as a national land redistribution programme, but there are also legitimate fears that a more reactionary approach might prevail and block this kind of expropriation. On the other hand, the >public-use= requirement can be used to argue that only those expropriations that are actually for public use have to be compensated, while expropriations that do not result in public use of the property do not have to be compensated. The reasoning here may seem to be rather revolutionary, but in fact it is similar to what was argued in cases like Hewlett, Manitoba Fisheries and Societe United Docks, and as long as the analysis is more sophisticated than in Hewlett it can be a useful tool: the fact that the state >uses= the property (by saving on payment of debts, by trading on the goodwill of the closed-down company) implies there should be compensation. It can be argued that this approach should distinguish the situation in Societe United Docks (where the state arguably did not use the goodwill of the redundant enterprises) from the position in Manitoba Fisheries (where the state indeed seemed to trade on the goodwill of the closed-down businesses), which is useful. However, in the final analysis it is again necessary to return to all the contextual determinants to reach a just and equitable decision: the values and purposes promoted by the Constitution (transformation of land holdings or the economy or society at large, national reconciliation, restitution of specific injustices, attraction of foreign investment, protection of the security of minorities, cultural upliftment, urbanisation can all be relevant); the social, economic and political realities, the facts of the case, the nature of the property involved, the balance that has to be struck between the public interest and the individual interests of those affected, the kind of state power employed, the vulnerability of the individual or group affected, and so on. Rubenfeld=s >public use= argument serves to open up new perspectives on the nature of expropriation, but it cannot (and was not meant to) be a hard and fast rule or a quick fix. State acquisition and public use of property are certainly relevant considerations when determining whether a police power regulation of property has crossed the line and actually effected an expropriation of the property, but it is not always a complete or a reliable or even a sensible test to employ. Hic leones sunt. Even in the absence of the vexing question whether a police power regulation amounts to an expropriation it is still possible to question the validity of a regulation: normally, any police power regulation has to be imposed by law, it has to serve the public purpose protected by the state=s police power and it has to be reasonable. In investigating this validity question the context of the case is once again important, as is illustrated by the proportionality tests usually employed in many jurisdictions. The proportionality test is an excellent example, if used correctly, of the way in which a court should consider the context when deciding a regulation case. Proportionality means that a regulation is only constitutionally justifiable if it is demonstrably reasonable, taking into account all the relevant factors and the context. This once again involves consideration of and mutual weighing up of a huge variety of disparate factors, including the social, political and economic context, the facts of the case, the nature of the property, the harshness of the burden imposed and possible alternatives, and the possibility of establishing a fair balance between the public interest and the individual interests involved. Any evasion of the difficulties involved in judging the proportionality issue runs the risk of arriving at an unfair, mechanical and irresponsible result. Cases like the German Contergan and Mitbestimmung decisions illustrate the difficulty of and the necessity for this kind of judgment: it is very hard, but it has to be done. This brings me to a last set of observations on the case analysis above. I think it is fair to say that the cases discussed illustrate the dangers involved in using precedent uncritically and indiscriminately. Without making strong claims regarding the correctness or finality of the distinctions I introduced above, I think I can conclude that it is absolutely essential to analyse possible (and sometimes not so obvious) differences between possible precedents and the case in hand very carefully and critically before relying on existing decisions too heavily. What looks like a sensible and reasonable decision in one case simply is not authority for another if the circumstances differ in one or two essential aspects, and this fact has to be given account of in every situation where the case-law method is employed. Secondly, as far as case law in a comparative perspective is concerned, it is important to give account of the differences between the constitutional texts (and contexts) within which various precedents were created. In some cases the constitutional text and context make little or no difference: despite the fact that the Australian Commonwealth Constitution does not actually include a property clause in the traditional sense, section 51(xxxi) is and has for a long time been interpreted as if it were such a property clause, and for the most part this textual quirk can simply be ignored when looking at Australian case law. Similarly, the property clause in article 1 of the First Protocol to the European Convention is simply read as if it referred to >property= although it actually refers to >peaceful enjoyment of possessions=, and in this case the textual differences seem to make little or no difference. The same goes for the lack of a proper expropriation clause in the Irish Constitution, the absence of a general limitation clause in the German Basic Law, or the lack of a compensation requirement in either the European Convention or the Austrian Bill of Rights, and for the fact that the strictly correct translation for Eigentum in the German, Austrian and Swiss property clauses is >ownership= and not >property= B case law indicates that these textual differences are irrelevant. However, several case analyses above illustrate that this is not always the case: the finer textual differences between the >standard= variation of the >double= property guarantee in the Constitution of Mauritius and the unique variation of the >double= property clause in the Zimbabwean Constitution are essential to a proper understanding and evaluation of the Societe United Docks and the Hewlett cases respectively. This brings me to comparative methodology. There is such a wealth of case law on constitutional property, not to mention the large number of property clauses on which no case law is reported (or where the reported case law is inaccessible), that I cannot escape the conclusion that it would be folly to discuss or study this field without extensive use of comparative material. The problem is, there is no handbook B there is not much of a developed methodology in this field, and the developed methodology that is available to us is either restricted by its focus on private-law (mostly in a civil-law context) or too generally aimed at the larger issues of comparative law or even human rights law. We need a properly sensitive methodology for the comparative study of constitutional property issues, with a strong focus on case law and a healthy sensitivity for context. Such a methodology has to leave us room for wide consultation of foreign law, with sufficient safeguards against unsuitable or insensitive comparisons. It should reflect the complexities of the shifting and opaque borderline between private law and public law, between the protection of private individual interests and the legitimate safeguarding and promotion of the public interest; and it should include careful consideration of the important role that the proportionality principle plays in human rights adjudication. It should provide us with suitable skills and strategies with which to negotiate the unknown and potentially dangerous terrain where both private individual property rights and the public interest struggle for recognition. Hic leones sunt.