POLICE POWER REGULATION OF INTANGIBLE COMMERCIAL PROPERTY AND THE CONSTITUTIONAL PROPERTY CLAUSE: A COMPARATIVE ANALYSIS OF CASE LAWI A.J. van der Waltz 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 gulation 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 Background article for a paper read at the second conference, entitled >Contemporary Issues in Property Law=, presented by the Centre for Property Law at the University of Reading from 25 to 27 March 1998 The article is based on sections from different chapters of the incomplete manuscript of AJ van der WaIt Constitutional Property Clauses: A Comparative Analysis(forthcom ing 1998, Juta& Co, Cape Town/Wetton/Johannesburg). I am grateful to Denise Prevost, Karen Prinsloo and Marjan Gerbrands for research assistance, and l owe a huge debt of gratitude to frank michelman, Joe Singer, Laura Underkuffler-Freund, Clement Ng=ong=ola, Johan Erasmus, Peter Butt, Klaus Stern, Neville Botha, Josef Kruger, Kate O=Regan, Gretchen Carpenter and John Murphy for comments on and suggestions regarding different chapters of the manuscript. The Centre for Research Development(Human Sciences Research Council, Pretoria ) the Research and Bursaries Committee(University of South Africa, Pretoria)and the Alexander von Hum boldt-Stiftung(Bonn)supported different stages of the research process during 1990 1992 and from 1995 to 1998. The views and opinions expressed in this papershould not be attributed to any of these institutions B lur Honns (BA)LLB LLD(Potchefstroom)LLM(Witwatersrand), Professor, Department of Private Law, University of South Africa, PO Box 392, 0003 Pretoria, South Africa. E-mail addres
1 POLICE POWER REGULATION OF INTANGIBLE COMMERCIAL PROPERTY AND THE CONSTITUTIONAL PROPERTY CLAUSE: A COMPARATIVE ANALYSIS OF CASE LAW1 A.J. van der Walt2 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 1 Background article for a paper read at the second conference, entitled >Contemporary Issues in Property Law=, presented by the Centre for Property Law at the University of Reading from 25 to 27 March 1998. The article is based on sections from different chapters of the incomplete manuscript of AJ van der Walt Constitutional Property Clauses: A Comparative Analysis (forthcoming 1998, Juta & Co, Cape Town/Wetton/Johannesburg). I am grateful to Denise Prévost, Karen Prinsloo and Marjan Gerbrands for research assistance, and I owe a huge debt of gratitude to Frank Michelman, Joe Singer, Laura Underkuffler-Freund, Clement Ng=ong=ola, Johan Erasmus, Peter Butt, Klaus Stern, Neville Botha, Josef Krüger, Kate O=Regan, Gretchen Ca rpenter and John Murphy for comments on and suggestions regarding different chapters of the manuscript. The Centre for Research Development (Human Sciences Research Council, Pretoria), the Research and Bursaries Committee (University of South Africa, Preto ria) and the Alexander von Humboldt-Stiftung (Bonn) supported different stages of the research process during 1990, 1992 and from 1995 to 1998. The views and opinions expressed in this paper should not be attributed to any of these institutions. 2 B Iur Honns (BA) LLB LLD (Potchefstroom) LLM (Witwatersrand); Professor, Department of Private Law, University of South Africa, PO Box 392, 0003 Pretoria, South Africa. E-mail address:
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 any given interference with intangible property can be considered and discussed more easty il of a state monopoly or the >regulatory= cancellation of a state debt. It follows that the legitimac within a framework that allows a fundamental evaluation of the nature and effect of d ifferent 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 stud 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. Conclud ing remarks and evaluation 1. Introduction Comparative constitutional case law presents the analyst with a quite bewildering array of precedents regarding the valid ity, 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 regard ing intangible property and particularly intangible property with some form of commercial interest or value. Included in company; debts, a business interest in a commercial licence, permit or quota; imate es in a this category are business enterprises in general; the goodwill of a business concern; share property interests deriving from or connected with patents, copyrights, trademarks and confidential commercial information; and so forth. Occasionally, reference will be made to
2 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 valid ity 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 specif ic factors not necessarily germane to the regulation of intangible property as such The third consideration narrows the analysis down to situations where the regulation 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 valid ity. The regulation can have extraord inarily 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 valid ity in general. Some general remarks about the nature of regulation and the public interest it serves are included in the conclusion Such as the nature of land as a limited resource, considerations relating to planning and development theory and policy, conservation principles and practices, and so forth Is it a >police power= regulation or an >em inent domain= expropriation of the property; or does it fall inte the middle category of >inverse condemnations=? Even if it is accepted that the lim itation constitutes a >police power= deprivation rather than an >eminent domain=expropriation, is it constitutionally justifia ble in view of the harshness of its effects for the property owners involved
3 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 factors3 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 imposed4 and its general validity.5 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. 3 Such as the nature of land as a limited resource, considerations relating to planning and development theory and policy, conservation principles and practices, and so forth. 4 Is it a >police power= regulation or an >eminent domain= expropriation of the property; or does it fall into the middle category of >inverse condemnations=? 5 Even if it is accepted that the limitation constitutes a >police power= deprivation rather than an >eminent domain= expropriation, is it constitutionally justifiable in view of the harshness of its effects for the property owners involved?
While these demarcation principles may seem artificial or arbitrary to some, they have of the inquiry to manageable proportions. Some of the implications of this inquiry could be ope the advantage of isolating a relatively clear field of investigation and thereby reducing the sce suitable for extension to other areas in the broader field of constitutional property, and perhaps they can even be used to construct a rud imentary 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 somethin& ubstantial about the property clause in section 28 of the interim Constitution of 1993, an 997(11)BCLR 1489(CC); 1998(1)SA 300(CC). For a discussion of the case see AJ van der WaIt h Botha >Getting to grips with the new constitutionalorder: Critical comments on Harksen v lane No (forthcoming 1998)13 SA Public Law. The property clause appears in s 28 of the interim Constitution; s 25 of the final Constitution. Both versions feature a deprivation clause( s 28(2), s 25(1)and an expropriation clause with prov ision for compensation (s 28(3), s 25(2)and 25(3). S 28(1)also included a positive property guarantee, and s 25 (5)-(9)contains land-reform provisions. S 28 referred to >rights in property=, s 25 to >property= For a discussion of s 25 see AJ van der Walt The Constitutional Property Clause: A Comparative Analysisof Section 25 ofthe South African Constitution of 1996(1997)Juta& Co, Cape Town/Wetton/Johannesburg. In the so-called First Certification Case(reported as In Re: Certification ofthe Constitution of the Republic of South africa, 19961996(10)BCLR 1253 (CC: 1996(4)SA 744(CC), the Constitutional Court was asked to certify the constitutional validity of the initial draft of the Final Constitution, and a few interesting remarks were made on the nature and purpose of a property clause in s 25(at pa ras[701-75 1286D-1289C, 797D-80 Section 28 of the 1993 Const itution was referred to in Transkei Public servants= Association v government of the Republic of South Africa and Others 1995(9)BCLR 1235(Tk)(whether state contracts, pension and mployment benefits were >property= for purposes of s 28; answered in the affirmative in principle ); Transvaal Agricultural Union v Ministerof land Affairs and Another 1996(12)BCLR 1573(CC)(whether provisions in the restitution of Land Rights Act 22 of 1994 were valid in view of s 28; see further T Turning a deaf ear: The right to be heard by the Constitutional Court=(1997)13 SA Journalon Rights 216-227) Constitution of the Republic of South Africa 200 of 1993, now replaced by the Constitution of the republic of South Africa 1996. The 1996 Constitution was accepted by the Constitutional Assembly on 8 May 1996 and, afterthe final draft was certified by the Constitutional Court, it came into operation on 4 February 1997. In the so-called First Certification Case(reported as n Re: Certification ofthe Constitution ofthe Republic of South Africa, 19961996(10)BCLR 1253(CC, 1996 (4)SA 744(CC), the Constitutional Court was asked to certify the constitutional va lidity of the initial draft of the Final Constitution, which had to comply with certa in constitutional principles referred to in the interim Constitution. For a discussion the process see D van Wyk >=n Paar opmerkings en vrae oor die nuwe grondwet=(1997)60 Tydskrif vir die Hedendaagse Romeins-Hollandse Reg 377-394, M Chaskalson& D Davis >Constitutiona lism, the rule of law and the First Certification Judgment: Ex Parte Chairperson of the Constitutional Assemblyinre Certification ofthe Constitution ofthe Republic ofSouth Africa 19961996(4)SA 744(CC)=(1997)13 SA Journal on Human Rights 430-445
4 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. 6 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 287 of the interim Constitution of 1993,8 and it 6 1997 (11) BCLR 1489 (CC); 1998 (1) SA 300 (CC). For a discussion of the case see AJ van der Walt & H Botha >Getting to grips with the new constitutional order: Critical comments on Harksen v Lane NO= (forthcoming 1998) 13 SA Public Law. 7 The property clause appears in s 28 of the interim Constitution; s 25 of the final Constitution. Both versions feature a deprivation clause ( s 28(2), s 25(1)) and an expropriation clause with provision for compensation (s 28(3), s 25(2) and 25(3)). S 28(1) also included a positive property guarantee, and s 25(5)-(9) contains land-reform provisions. S 28 referred to >rights in property=, s 25 to >property=. For a discussion of s 25 see AJ van der Walt The Constitutional Property Clause: A Comparative Analysis of Section 25 of the South African Constitution of 1996 (1997) Juta & Co, Cape Town/Wetton/Johannesburg. In the so-called First Certification Case (reported as In Re: Certification of the Constitution of the Republic of South Africa, 1996 1996 (10) BCLR 1253 (CC; 1996 (4) SA 744 (CC)), the Constitutional Court was asked to certify the constitutional validity of the initial draft of the Final Constitution, and a few interesting remarks were made on the nature and purpose of a property clause in s 25 (at pa ras [70]-[75]1286D-1289C; 797D-800B). Section 28 of the 1993 Constitution was referred to in Transkei Public Servants= Association v Government of the Republic of South Africa and Others 1995 (9) BCLR 1235 (Tk) (whether state contracts, pension and employment benefits were >property= for purposes of s 28; answered in the affirmative in principle); Transvaal Agricultural Union v Minister of Land Affairs and Another 1996 (12) BCLR 1573 (CC) (whether certain provisions in the Restitution of Land Rights Act 22 of 1994 were valid in view of s 28; see further T Roux >Turning a deaf ear: The right to be heard by the Constitutional Court= (1997) 13 SA Journal on Human Rights 216-227). 8 Constitution of the Republic of South Africa 200 of 1993, now replaced by the Co nstitution of the Republic of South Africa 1996. The 1996 Constitution was accepted by the Constitutional Assembly on 8 May 1996 and, after the final draft was certified by the Constitutional Court, it came into operation on 4 February 1997. In the so-called First Certification Case (reported as In Re: Certification of the Constitution of the Republic of South Africa, 1996 1996 (10) BCLR 1253 (CC; 1996 (4) SA 744 (CC)), the Constitutional Court was asked to certify the constitutional validity of the initial draft of the Final Constitution, which had to comply with certain constitutional principles referred to in the interim Constitution. For a discussion of the process see D van Wyk >=n Paar opmerkings en vrae oor die nuwe grondwet= (1997) 60 Tydskrif vir die Hedendaagse Romeins-Hollandse Reg 377-394; M Chaskalson & D Davis >Constitutionalism, the rule of law and the First Certification Judgment: Ex Parte Chairperson of the Constitutional Assembly in re: Certification of the Constitution of the Republic of South Africa 1996 1996 (4) SA 744 (CC)= (1997) 13 SA Journal on Human Rights 430-445
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 head ing, 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 valid ity of section 21 0 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 Courtand, 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(Pry) Ltd2 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 propert 1997(11)BCLR 1489(CC): 1998(1)SA 300(CC). References to this case below cite the relevant paragraph number in the decision. The discussion of this case below is based partly on sections of AJ van der WaIt h Botha >Getting to grips with the new constitutionalorder: Crit ical comments on Harksen Lane NO=(forthcoming 1998)13 SA Public law The applicant also attacked ss 64 and 65, but for present purposes this a spect is ignored Now the High Court; see the 1996 Constitution s 166(c) 12 1992(1)SA9(A)at151J Now the Supreme Court of Appeal; see the 1996 Constitution s 166(b)
5 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 Others9 concerns an attack on the validity of section 2110 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 Court11 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) Ltd12 the former Appellate Division of the Supreme Court13 stated obiter that the effect of the vesting of the solvent spouse=s property is to transfer full ownership (dominium) of the property 9 1997 (11) BCLR 1489 (CC); 1998 (1) SA 300 (CC). References to this case below cite the relevant paragraph number in the decision. The discussion of this case below is based partly on sections of AJ van der Walt & H Botha >Getting to grips with the new constitutional order: Critical comments on Harksen v Lane NO= (forthcoming 1998) 13 SA Public Law. 10 The applicant also attacked ss 64 and 65, but for present purposes this a spect is ignored. 11 Now the High Court; see the 1996 Constitution s 166(c). 12 1992 (1) SA 9 (A) at 15I-J. 13 Now the Supreme Court of Appeal; see the 1996 Constitution s 166(b)
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 presid ing at meetings of the cred itors 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. I6 attached by the trustees of the insolvent estate, and she was summoned to appear andbo ty was The applicant=s husband=s estate was sequestrated, and subsequently her prop interrogated at a meeting of her husband=s creditors. The applicant challenged the constitutional valid ity 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 an nd amounts to unfair discrimination; and that sections 64 and 65 are unconstitutional for related reasons. The Cape Supreme Courtreferred the constitutional challenge to the Constitutional Court, where the Section 2 1 provides certa in safeguards to protect the solvent spouse, amongst others that the solvent spouse can reclaim the property upon providing proof of ownership of the property in question, but this cannot occur without action(and often litigation) from the side of the solvent spouse, regardless of the nature of the property in question and the actual position of the insolvent spouse with regard to such property In her minority judgment, O=Regan J conducted an excellent comparative overview(at paras[ 1051-11oD to indicate that a similar procedure to the vesting provision in s 21 is used only in the Netherlands. In the UK, Canada, Australia and New Zealand the corresponding law employs prov ision for a series of voida ble or reviewable transactions to protect the interests of innocent creditors of the insolvent. A provision in German law that creates a presumption that movable property in the possession of the insolvent spouse(or in the possession of both spouses)at the time of insolvency belongs to the insolvent spouse is of farmore lim ited scope, even though it resembles the South African provision in some respects. The fact that provision for voidable transactions offers a less burdensome and better altemative is underlined by the fact that this approach has already been recommended by the South African Law Commission for implementation in South African law. O=Regan J concurred in the majority judgment on the property issue in Harksen, and used the comparative analysis only for purposes of the eq uality issue(to indicate that a less burdensome alternative is available, which makes it possible to argue that the differentiation between solvent spouses and others who had dealings with the insolvent amounts to unfa ir discrimination) The majority(and the minority judgments did not raise any objections on this point)held that the attack on sS 64 and 65 are unfounded, since it is clear that the kind of questions that are allowed in the procedure foreseen by these articles cannot infringe on the solvent spouse=s rights in any way: a question that would infringe the constitutional rights of the solvent spouse cannot be >lawfully put= in terms of the Act(at paras 69}-76] Now the Cape High Court; see note 11
6 from the spouse to the master or trustee.14 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.15 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.16 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 Court17 referred the constitutional challenge to the Constitutional Court, where the 14 Section 21 provides certain safeguards to protect the solvent spouse, amongst others that the solvent spouse can reclaim the property upon providing proof of ownership of the property in question, but this cannot occur without action (and often litigation) from the side of the solvent spouse, regardless of the nature of the property in question and the actual position of the insolvent spouse with regard to such property. 15 In her minority judgment, O=Regan J conducted an excellent comparative overview (at paras [105]- [110]) to indicate that a similar procedure to the vesting provision in s 21 is used only in the Netherlands. In the UK, Canada, Australia and New Zealand the corresponding law employs provision for a series of voidable or reviewable transactions to protect the interests of innocent creditors of the insolvent. A provision in German law that creates a presumption that movable property in the possession of the insolvent spouse (or in the possession of both spouses) at the time of insolvency belongs to the insolvent spouse is of far more limited scope, even though it resembles the South African provision in some respects. The fact that provision for voidable transactions offers a less burdensome and better alternative is underlined by the fact that this approach has already been recommended by the South African Law Commissio n for implementation in South African law. O=Regan J concurred in the majority judgment on the property issue in Harksen, and used the comparative analysis only for purposes of the equality issue (to indicate that a less burdensome alternative is available, which makes it possible to argue that the differentiation between solvent spouses and others who had dealings with the insolvent amounts to unfair discrimination). 16 The majority (and the minority judgments did not raise any objections on this point) held that the attack on ss 64 and 65 are unfounded, since it is clear that the kind of questions that are allowed in the procedure foreseen by these articles cannot infringe on the solvent spouse=s rights in any way: a question that would infringe the constitutional rights of the solvent spouse cannot be >lawfully put= in terms of the Act (at paras [69]-[76]). 17 Now the Cape High Court; see note 11
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 find ing on the property question- and part of the equality question, but disagreed with the majority decision on the main aspect of the equality issue 22 For present purposes we are interested in the propert 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 )of the interim Constitution. The basis for this transfer of the solvent spouse=s rights in property to the master and(upon appointment) thea argument is that the vesting of the solvent spouse=s property in terms of section 21 amounts trustee of the insolvent estate, while making no provision for compensation In his judgment for the majority Gold stone 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,2is 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 Court2to support the statement that ar Per Goldstone J, with whom Chaskalson P, Langa DP, Ackerman j and Kriegler J concurred Per O=Regan J, with whom Madala Jand Mokgoro J concurred, and per Sachs J in a separate minority Judgment Thats 21 of the Act is not inconsistent with s 28(3)of the interim Constitution. That ss 64 and 65 are not inconsistent with s 8 of the interim Constitution Thats 21 is not inconsistent with s 8 of the interim Constitution This subsection corresponds with s 25(2)of the 1996 Constitution, and deals with the power to expropriate and the requirements for a valid expropriation; it has to be effected n terms of law of general application, be for a public purpose or in the public interest, and be subject to just and equita ble compensation as provided for As was pointed out earlier, the former Appellate Division of the Supreme Court stated obiter n De villiers NO v Delta Cables(Pty) Ltd 1992(1)sa 9(A)that the effect of this provision was to transfer ownership (dominium) of the solvent spouse=s property to the master or trustee. The term >transfer= in this statement has to be read with circumspection, since the vesting of property in terms of s 21 (like expropriation in general) is obviously a case of original acquisition of property, which takes place without the consent or cooperation of the previous owner, thereby rendering the term >transfer= somewhat confusing Sections 25(1)and 25(2)of the final Constitution At par[32] Beckenstraterv Sand River rrigation Board 1964(4)SA 510(T)at515A-C
7 majority18 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 minority19 agreed with the majority finding on the property question20 and part of the equality question,21 but disagreed with the majority decision on the main aspect of the equality issue.22 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 Constitution23 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,24 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,25 is recognised in South African law and in many foreign jurisdictions. The main difference, as the Court described it,26 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 Court27 and two decisions of the Zimbabwe Supreme Court28 to support the statement that an 18 Per Goldstone J, with whom Chaskalson P, Langa DP, Ackerman J and Kriegler J concurred. 19 Per O=Regan J, with whom Madala J and Mokgoro J concurred, and per Sachs J in a separate minority judgment. 20 That s 21 of the Act is not inconsistent with s 28(3) of the interim Constitution. 21 That ss 64 and 65 are not inconsistent with s 8 of the interim Constitution. 22 That s 21 is not inconsistent with s 8 of the interim Constitution. 23 This subsection corresponds with s 25(2) of the 1996 Constitution, and deals with the power to expropriate and the requirements for a valid expropriation: it has to be effected in terms of law of general application, be for a public purpose or in the public interest, and be subject to just and equitable compensation as provided for. 24 As was pointed out earlier, the former Appellate Division of the Supreme Court stated obiterin De Villiers NO v Delta Cables (Pty) Ltd 1992 (1) SA 9 (A) that the effect of this provision was to transfer ownership (dominium) of the solvent spouse=s property to the master or trustee. The term >transfer= in this statement has to be read with circumspection, since the vesting of property in terms of s 21 (like expropriation in general) is obviously a case of original acquisition of property, which takes place without the consent or cooperation of the previous owner, thereby rendering the term >transfer= somewhat confusing. 25 Sections 25(1) and 25(2) of the final Constitution. 26 At par [32]. 27 Beckenstrater v Sand River Irrigation Board 1964 (4) SA 510 (T) at 515A-C
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. 29 On the basis of the considerations mentioned above goldstone j decided 30 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 olvent 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 find ing is correct, but rather that the constitutional valid ity 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 283)of the interim Constitution has to be interpreted witl 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 iew, the Court=s reliance on these decisions+is problematic, since there are fundamental Hewlett v Minister of Finance and Another 1982(1)SA 490(ZSC)and Davies and Others v Ministero Lands, Agriculture and Water Development 1997(1)SA 228(ZSC) The Court=s reference to an Indian case, HD Vara v State of Maharashtra 1984 AIR 866(SC), is probably inappropriate in the circumstances, as this decision dealt with the distinction between expropriation or len pulsory acquisition and requisition of property the latter term being an old-fashioned reference to the porary dispossession of tangible property for use by the state or the armed forces during a war or an emergency situation. Although Goldstone J at par [34] found it unnecessary to consider the question, it is important to note that this distinction is not identical to the distinction at hand, namely between expropriation and deprivation, since a deprivation of property can be and often is permanent and not merely temporary, and it can involve the property or certa in rights in the property and not just the possession or use of the property. S of the 1996 Constitution makes provision for states of emergency, under which some of the rights in the Bill of Rights may be derogated. Property(s 25)is not included in the table of non deroga ble rights At paras 351-371 Beckenstraterv Sand River /rrigation Board 1964(4)SA 510(T)at515A-C Hewlett v Minister offinance and Another 1982(1)SA 490(ZSC) Davies and Others v Ministerof lands, Agriculture and Water Development 1997(1)SA 228(ZSC) And especially the Zim bawean cases. The Beckenstrater case was decided by the Supreme Court(now the 8
8 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.29 On the basis of the considerations mentioned above, Goldstone J decided30 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 decision31 and the Zimbabwean Hewlett32 and Davies33 decisions. In my view, the Court=s reliance on these decisions34 is problematic, since there are fundamental 28 Hewlett v Minister of Finance and Another 1982 (1) SA 490 (ZSC) and Davies and Others v Minister of Lands, Agriculture and Water Development 1997 (1) SA 228 (ZSC). 29 The Court=s reference to an Indian case, HD Vara v State of Maharashtra 1984 AIR 866 (SC), is probably inappropriate in the circumstances, as this decision dealt with the distinction between expropriation or compulsory acquisition and requisition of property, the latter term being an old -fashioned reference to the temporary dispossession of tangible property for use by the state or the armed forces during a war or an emergency situation. Although Goldstone J at par [34] found it unnecessary to consider the question, it is important to note that this distinction is not identical to the distinction at hand, namely between expropriation and deprivation, since a deprivation of property can be and often is permanent and not merely temporary, and it can involve the property or certain rights in the property and not just the possession or use of the property. S 37 of the 1996 Constitution makes provision for states of emergency, under which some of the rights in the Bill of Rights may be derogated. Property (s 25) is not included in the table of non - derogable rights. 30 At paras [35]-[37]. 31 Beckenstrater v Sand River Irrigation Board 1964 (4) SA 510 (T) at 515A-C. 32 Hewlett v Minister of Finance and Another 1982 (1) SA 490 (ZSC). 33 Davies and Others v Minister of Lands, Agriculture and Water Development 1997 (1) SA 228 (ZSC). 34 And especially the Zimbabwean cases. The Beckenstrater case was decided by the Supreme Court (now the
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 cred itors. It does not take an overactive imagination to see that the three ituations 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 sam breath as the Hew lett case, even though both are decisions of the Zimbabwe Supreme Court Both provide authority for the valid ity 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 question cancelled a state debt, thereby destroy ing the cred itor=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 y Zimbabwe Teachers Association and Othersshould also be distinguished carefully from Hew lett, although both dealt with money debts. In Teachers= Association the ratio decidendi was not>(as in Hew lett) 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 A part 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,3a 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 High Court )and has no real constitutional authority or interest. The case concerned the expropriation of water servitudes in terms of the Water Act 54 of 1956.s 94 1997(1)SA209(ZSC. Although the court is not at all clear about this, statements conceming the question of acquisition confuse the issue considerably ome of the relevant cases are d iscussed later in this article
9 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 Others35 should also be distinguished carefully from Hewlett, although both dealt with money debts. In Teachers= Association the ratio decidendi was not36 (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,37 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 High Court) and has no real constitutional authority or interest. The case concerned the expropriation of water servitudes in terms of the Water Act 54 of 1956, s 94. 35 1997 (1) SA 209 (ZSC). 36 Although the court is not at all clear about this; statements concerning the question of acquisition confuse the issue considerably. 37 Some of the relevant cases are discussed later in this article
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 jud icial discourse on the problem of regulation of intangible commercial property has not come to terms et 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 ind ividual 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 regulato 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
10 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