Faynaz Import and Export Enterprises CC v The Commissioner of Customs and Excise

• Jurisdiction: South Africa
• Judge: Murphy J
• Judgment Date: 12 February 2009
• Court: Transvaal Provincial Division
• Docket Number: 8642/2004
• Citation: 2009 JDR 0086 (T)

Murphy J:

1.

The plaintiff, a close corporation involved in import and export, has instituted action against the defendant the Minister of Safety and Security, for the return of goods lodged in a customs bonded warehouse or alternatively for damages in the amount of the value of the goods, valued by agreement between the parties at R460 000.

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2.

The plaintiff originally issued summons on 1 April 2004 against the Commissioner of Customs and Excise, as first defendant, and the Controller of Customs and Excise, Johannesburg, as the second defendant, under case number 8642/04. In their plea, filed on 9 December 2004, the Commissioner and the Controller denied that they had ever detained the goods in question or sealed the bonded warehouse from which they had disappeared and consequently further denied that they were ever in possession of the goods or knowing of their whereabouts. Subsequent to receiving this plea the plaintiff issued summons against the Minister of Safety and Security under case number 32457/05 on 21 September 2005. On 31 August 2007 an order was granted for the consolidation of the two actions under the original case number 8642/04 with the Minister cited as the third defendant. Shortly before the matter was called the plaintiff withdrew the action against the first and second defendants with the result that it proceeds only against the Minister, to whom I shall refer as the defendant.

3.

In the particulars of claim to the summons issued on 21 September 2005 it is alleged that on 14 December 2001 members of the South African Police Service ("SAPS") under the command of Inspector Charles Bezuidenhout ("Bezuidenhout") took control of the customs bonded warehouse of Tonnit Transport CC situated at 274 Main Reef Road, Denver, Johannesburg at

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which the plaintiff had lodged the contents of five containers consisting of imported paper handkerchiefs, cleansing facial tissues and towels. No notices of detention or seizure (in terms of the relevant legislation) were served upon the plaintiff in respect of its goods at that time or subsequently. As will become clearer in due course, the relevant goods, along with everything else in the warehouse, were removed from the warehouse some time between 14 December 2001 and 8 January 2002. The whereabouts of the goods is presently unknown and it is alleged by the plaintiff that the SAPS has lost them. The plaintiff accordingly alleges that the defendant is liable to return the goods to the plaintiff or to compensate the plaintiff for the value thereof. Counsel for the plaintiff stated in his opening address that the claim was essentially a reivindicatio. In the alternative the plaintiff brings suit on the actio ad exhibendum for compensation. The claim is formulated in general terms sufficient to found also a claim on the actio legis Aquiliae in the event of the requirements of the actio ad exhibendum not being met, a matter to which I will return later.

4.

The particulars further allege that Bezuidenhout and any other police officer involved were acting in the course and scope of their employment with the SAPS.

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5.

The defendant's plea is to the effect that at some unspecified time prior to 14 December 2001 Bezuidenhout received information from an informant that their was second-hand clothing stored at the bonded warehouse which had been illegally imported into the country. Bezuidenhout visited the warehouse and issued a detention notice in respect of the second-hand clothing, which he served upon Mr Trevor Naidoo, the owner of the warehouse business. Thereafter Bezuidenhout left the premises. He returned later on the same day and discovered that the second-hand clothing had been removed from the warehouse and had been stored in other storage facilities on the same premises. Members of the South African Revenue Services and Border Police present at the premises, then took over the matter. Bezuidenhout returned to the premises on 14 December 2001, and perused the registers, bond books and files kept at the premises. After that he issued a detention notice in terms of section 88(1)(a) read with section 87 of the Customs and Excise Act 91 of 1964, whereby he detained for investigation purposes all registers, bond books and files. The defendant accordingly denied that Bezuidenhout or any member of the SAPS detained or seized the plaintiff's goods. However, he admitted that Bezuidenhout acted in the course and scope of his employment in relation to the detention of the registers, bond books, files and second-hand clothing is concerned. The defendant further denied having knowledge of the whereabouts of the plaintiff's goods and denied that they were lost by the SAPS as claimed by the plaintiff. It is also

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alleged that Bezuidenhout, after finalising his investigations, handed the bond books, registers and files to officials of the South African Revenue Service for the further handling of the matter. It was accordingly denied that the defendant was liable to return the goods or to compensate the plaintiff for their value.

6.

The defendant has also raised a special plea. As originally formulated, the special plea alleged prescription as well as time barring under both section 96(1)(a) of the Customs and Excise Act 91 of 1964 and section 3 of the Institution of Legal Proceedings Against Certain Organs of State Act 40 of 2002. In argument before me, counsel for the defendant abandoned any reliance upon section 96(1)(a) of Act 91 of 1964 and limited the special plea to the time bar under section 3 of Act 40 of 2002. The section provides that no legal proceedings for the recovery of a debt may be instituted against an organ of state unless the creditor has given and served on the organ of state notice in writing of his or her intention to institute the legal proceedings within six months from the date on which the debt became due. The notice must briefly set out the facts giving rise to the debt and such particulars of the debt as are within the knowledge of the creditor. In terms of section 3(3)(a), a debt may not be regarded as having been due until the creditor has knowledge of the identity of the organ of state and of the facts giving rise to the debt, but a creditor must be regarded as having acquired such knowledge as soon as he, she or it

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could have acquired it by exercising reasonable care, unless the organ of state wilfully prevented him, her or it from acquiring such knowledge. In terms of section 3(4), if an organ of state relies on a creditor's failure to serve notice timeously the creditor may apply to court for condonation, which the court may grant if it is satisfied that (i) the debt has not been extinguished by prescription; (ii) good cause exists for the failure by the creditor; and (iii) the organ of state was not unreasonably prejudiced by the failure.

7.

In his special plea the defendant avers, such being common cause, that the plaintiff's notification to institute legal proceedings was only given to the defendant on 1 February 2005 and that summons was served on the defendant on or about 27 September 2005. He further alleges that the plaintiff's cause of action arose on 14 December 2009 when the plaintiff's goods were allegedly detained by Bezuidenhout or members of the SAPS. It was therefore submitted that the plaintiff's cause of action arose more than three years before summons was issued; that the plaintiff's notice was not issued and served on the defendant within six months from the date the alleged debt became due within the meaning of section 3 of Act 40 of 2002; and the plaintiff failed to bring an application for condonation of such failure. Consequently, he contended that the plaintiff is barred from instituting the action. No plea was made that the debt had prescribed under the Prescription Act.

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8.

At the commencement of the trial the parties were ad idem that the special plea could only be decided at the end after hearing all the evidence and could not be disposed of in limine. For that reason I propose first to deal with the merits.

9.

The plaintiff led evidence from four witnesses: Mr Nazir Talia ("Talia"), the sole member of the plaintiff; Mr Nassim Pahad ("Pahad"), the shipping agent responsible for the shipping and warehousing of the plaintiff's goods who operated initially through NP Shipping Services (Pty) Ltd and later through Pahad Shipping CC ("NP Shipping"); Mr Trevor Naidoo, the principal member of Tonnit Transport Services CC ("Tonnit"), the company that operated the bonded warehouse; and Mr Johan Steyn a customs official employed in the post clearance inspectorate. The defendant led only the evidence of Bezuidenhout.

10.

It is not disputed that the plaintiff imported five containers of paper products from Taiwan in August 2001 through Durban and that these were in turn cleared by NP Shipping, transported to Johannesburg, unpacked and warehoused in the Tonnit bonded warehouse. Tonnit operated the bonded warehouse in accordance with the required authorisation of the Commissioner of Customs and Excise ("the Commissioner"). The advantage to the plaintiff of storing the goods at a bonded warehouse is

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that customs duty would be levied on the goods in terms of the Act only in the event of the goods being removed from the warehouse when sold to purchasers. Customs duty is deferred until the importer sells the goods within South Africa. The plaintiff had no direct dealings with Tonnit and was represented throughout the import, clearing and warehousing processes by NP Shipping. Talia was aware though that NP Shipping had housed the goods at the Tonnit bonded warehouse.

11.

It must be emphasised at the outset that the plaintiff's imported goods were never the subject of...