A conceptual overview of the age-old acquisitive prescription of immovable property, expropriation & Section 25 of the Constitution

Governed by the Prescription Act 18 of 1943 and Prescription Act 68 of 1969, acquisitive prescription is an original form of acquisition whereby a right of ownership is acquired in respect of movable or immovable property by means of the open and undisturbed possession thereof for an uninterrupted period of 30 years. Consequently, if all requirements for acquisitive prescription have been met, after the expiration of the 30-year period, the possessor becomes the owner of the (movable/immovable) property in question. Practically, in the case of immovable property, ownership therefore passes without the registration thereof and the new owner can then, in terms of section 33 of the Deeds Registries Act 47 of 1937, apply to have the property registered in his/her name.

The concept of acquisitive prescription is often misconstrued as expropriation and further as being in contravention section 25 of the Constitution of South Africa, 1996 (hereinafter “the Constitution”).

Expropriation, governed by empowering legislation and the Expropriation Act 63 of 1975, differs from acquisitive prescription. Expropriation occurs specifically when an owner is divested of title in respect of the whole or part of their property (usually land) by the State, against compensation. In Harvey v Umhlatuze Municipality and Others 2011 (hereinafter the “Harvey case”), the Court held that “the State has no general common-law power to expropriate. The power to expropriate is derived from various statutes dealing with the expropriation of property by governmental institutions for specific purposes. The right to expropriate, granted under statute, for example the Expropriation Act 63 of 1975, empowers the expropriator to expropriate the property for a public purpose against payment of compensation”.

Section 25 (1) and (2) of the Constitution, provides that: “(1) No one may be deprived of property except in terms of law of general application and that no law may permit arbitrary deprivation of property. (2) Property may be expropriated only in terms of law of general application— (a) for a public purpose or in the public interest; and (b) subject to compensation, the amount of which and the time and manner of payment of which have either been agreed to by those affected or decided or approved by a court”.

When a possessor acquires ownership in immovable property through acquisitive prescription, the landowner is deprived of his ownership in that land.  However, “deprivation” does not automatically amount “expropriation”. As seen above, expropriation has a specific set of requirements that are distinct from those of acquisitive prescription. . In the leading Constitutional Court judgment of First National Bank of SA Ltd t/a Wesbank v Commissioner, South African Revenue Service and Another; First National Bank of SA Ltd t/a Wesbank v Minister of Finance 2002 (hereinafter “the FNB case”), the Court held inter alia that all interferences with property qualify as deprivation, while only some deprivations amount to expropriation and, in quoting van der Walt (1997), stated that the term “deprivation” is distinguished very clearly from the narrower term “expropriation” in constitutional jurisprudence worldwide.

Accordingly, whilst amounting to deprivation, acquisitive prescription does not necessarily amount to expropriation. Nonetheless, any deprivation of property/property rights are to be constitutionally compliant with section 25 of the Constitution. However, as we know, property rights are not absolute and are determined and afforded by law and can be limited to facilitate the achievement of important social purposes (L. von Rummel, ‘Arbitrary Deprivation of Property: A Comparative Analysis Between German and South African Law’, LLM 2014).

The FNB case was a landmark decision for the interpretation of section 25 of the Constitution. The Court accordingly presented a helpful methodology to interpret this section of the Constitution as follows :“(a) Does that which is taken away from FNB [the property holder] by the operation of section 114 [operation of law] amount to “property” for purpose of section 25? (b) Has there been a deprivation of such property by the Commissioner [by the particular organ or entity]? (c) If there has, is such deprivation consistent with the provisions of section 25(1)? (d) If not, is such deprivation justified under section 36 of the Constitution? (e) If it is, does it amount to expropriation for purpose of section 25(2)? (f) If so, does the deprivation comply with the requirements of section 25(2)(a) and (b)? (g) If not, is the expropriation justified under section 36?”

Dr E. J. Marias in his 2011 LLD dissertation, “Acquisitive Prescription in View of Property”, provided an insightful application of the FNB methodology to assess the likelihood of acquisitive prescription being found unconstitutional/in contravention of section 25 of the Constitution as elucidated below:

The first stage of the FNB methodology is to establish whether the immovable property in question amounts “property” for purposes of section 25. In agreement with Marais, this question can be easily answered as the Court in FNB held that ownership of movables (and thereby also immovables) is central to the concept of property in South African constitutional law. As to the second stage of the methodology, namely whether deprivation of property took place, acquisitive prescription of land does qualify as a deprivation. It follows then that acquisitive prescription has to then comply with the requirements set out in section 25(1).

The requirements for deprivation under section 25(1) are that (i) it must take place in terms of law of general application and (ii) such law may not permit arbitrary deprivation. Since the Prescription Acts clearly constitutes a law of general application, the main issue is whether or not prescription results in arbitrary deprivation.

The Court in FNB essentially held that arbitrariness can be determined upon whether sufficient reasons exist for the deprivation and whether it is procedurally fair. In testing the arbitrariness of the deprivation, a “substantive arbitrariness test” may then be employed. Such substantive test entails whether there exists a sufficient nexus between the effects of prescription and the purpose it serves.

According to Marais, acquisitive prescription will be procedurally unfair if there are insufficient procedural safeguards that protect the rights of owners. Acquisitive prescription would be procedurally fair, since ownership is not easily lost due to the reasonably strict requirements for this type of acquisition in South African law, especially due to the fact that a person must possess property animo domini (i.e. physical control with intent). Furthermore, the 30-year period within which an owner may assert his rights and interrupt the running of prescription reinforces the security of ownership.

The Constitutional Court further held that the test into arbitrariness is contextual and will depend on the facts of each case. The scope of the deprivation determines whether the substantive arbitrariness test will involve a rationality or proportionality-like investigation, since instances of severe deprivation require stronger justification than those that are of a lesser degree.

Since prescription results in the loss of ownership, it can be said that convincing reasons need to be advanced in order for it to pass the scrutiny of section 25(1). To this end Marais, through his national and comparative law, advised that: acquisitive prescription fulfils a corrective function in jurisdictions with negative registration systems by lowering transaction cost; that the strict requirements for prescription  coupled with a very long 30-year period  are hard to satisfy, which is reinforced by the fact that an owner need only take minimal steps to prevent the running of prescription; that the fault for the loss of ownership can be laid at the door of the owner, since he, through negligence or inactivity, induces the possessor to rely on the legitimacy of his possession. Moreover, from an international and comparative law perspective, prescription – with its stricter requirements – is likely to amount to non-arbitrary deprivation of property in terms of section 25(1).

Lastly, the latter stages of the FNB methodology pertains to whether there would be conflict with section 25(2), and whether the deprivation of the property in question could perhaps amount to expropriation or as Marais puts it, “uncompensated expropriation”.

Since the Prescription Acts do not empower the State to expropriate and, further, makes no provision for the payment of compensation to an owner losing ownership, it is highly unlikely that acquisitive prescription could amount to expropriation. Moreover, common law expropriation is unknown in South African law, since an act of expropriation is reliant upon a legislative foundation only (as mentioned earlier in reference to the “Harvey case”).

In view of section 25 of the Constitution and the concepts of acquisitive prescription and expropriation, it is firstly clear that acquisitive prescription is not the same thing as expropriation. Secondly, per the methodology employed in the FNB case, acquisitive prescription constitutes non-arbitrary deprivation in the contextual framework of section 25 of the Constitution. It can therefore be concluded that acquisitive prescription is constitutionally compliant and in line with section 25 of the Constitution. Further, there appears to be no authoritative or leading South African case law refuting such conclusion.

Prepared by: 

Whitney Erin Maclons

LLB | LLM Mercantile Law | Associate – Litigation Department

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)