November 20, 2008
Corporations as "persons" - The South Africa Con Court
The Constitutional Court of South Africa issued a judgment of interest to Americans struggling with notions of corporate rights as "persons" under the Constitution, especially the Fourteenth Amendment. In Weare and Another v Ndebele NO and Others (Case CCT15/08, 18 November 2008), the Court considered the constitutionality of a state government prohibition on corporations holding betting licenses.
As the Media Summary provides:
The case arises out of an agreement between the applicants. Betting World (Pty) Ltd carries on the business of bookmaking in eight of South Africa’s nine provinces. It does not do so in KwaZulu-Natal [a state in the nation of South Africa] because section 22(5) of the Ordinance provides that juristic persons – companies like Betting World – may not hold licences to engage in bookmaking in the province. Only natural persons, such as Mr Weare, are permitted to hold these licences in KwaZulu-Natal. In other provinces, both juristic and natural persons may hold licences. In terms of the agreement, Mr Weare was to sell to Betting World, conditionally, the bookmaking business he operates under his licence. The authorities in KwaZulu-Natal took the view that the agreement violated section 22(5), whereupon the applicants challenged the constitutionality of the section.
In a unanimous judgment written by Van der Westhuizen J, the Court held that section 22(5) did not breach the right to equality before the law protected by the Constitution. The regulation of gambling represented a legitimate government purpose. Different practical considerations might indeed apply to the regulation of juristic persons and natural persons, and so it was not irrational to treat the two differently in the interests of regulation. The fact that reform was being considered, and that an allegedly better policy might exist, did not show that the current law was irrational. Furthermore, the section did not amount to unfair discrimination.
The opinion is available as a pdf here.
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