A licence restriction in legislation is not a deprivation of property for the purposes of section 25 of the Bill of Rights unless the right that has been taken away from licensees constitutes a right or interest worthy of protection and is substantial enough that its removal constitutes deprivation.
The SA Diamond Producers Organisation complained that new legislation forbidding licensed diamond dealers from being assisted by non-licensed persons (usually from overseas) during the viewing, purchasing or selling of unpolished diamonds at diamond exchange and export centres was a deprivation of property.
The court in South African Diamond Producers Organisation v Minister of Minerals and Energy N.O. and Others held that the ‘property’ in issue was the ownership of the diamonds and the licences (the court assumed that these licences are property). But there will only be a deprivation if the interference is ‘substantial’ – meaning that the intrusion must be so extensive that it has a legally relevant adverse impact on the rights of the affected party.
There will only be a deprivation if the interference is ‘substantial’.
Although the applicant alleged they were deprived of 30% of the value of their diamonds in trading, there was no such loss proved by the evidence. Even if the loss were proved, there would still be no deprivation because no legally protectable interest or entitlement was taken away by the new law. All that changed was the manner in which diamonds were sold at their highest agreed price. The licensees did not have a legally protectable interest to conduct their sales according to a particular practice.
A market is an inherently regulated space impacted by government regulation. The regulation in question did not constitute a substantial interference with the licensees’ rights of ownership in their diamonds or their licence.
It cannot be said that every time a government decision or regulation makes a particular business strategy unlawful, persons who prefer to conduct their business in accordance with that strategy have been deprived of property.