South African Reserve Bank v Khumalo and Another

• Jurisdiction: South Africa
• Judge: Harms DP, Nugent JA, Leach JA, Hurt AJA and Majiedt AJA
• Judgment Date: 31 March 2010
• Citation: 2010 (5) SA 449 (SCA)
• Docket Number: 235/09
• Hearing Date: 24 February 2010
• Counsel: PG Ginsburg SC (with KW Luderitz) for the appellant. A Bhana SC for the respondents.
• Court: Supreme Court of Appeal

Leach JA:

[1] This appeal concerns the validity of a notice of attachment issued by J the appellant, the South African Reserve Bank, under reg 22C(1)

Leach JA

of the Exchange Control Regulations [1] (the regulations) promulgated under the A Currency and Exchanges Act 9 of 1933 (the Act). For purposes of this judgment it can be accepted that references to 'the Treasury' in both the Act and the regulations are to be construed as referring to the appellant.

[2] The first respondent is a businessman and a director of various B companies, including the second respondent. From August 2002 the appellant held discussions with the two respondents in regard to whether various transactions had contravened the regulations. On 12 August 2008 the appellant, unpersuaded that the transactions in question did not amount to contraventions, issued the disputed notice, purporting to attach various assets of the respondents which it alleged were 'moneys or C goods' contemplated by reg 22C.

[3] This led to the respondents seeking urgent interim relief, including orders declaring the notice to be invalid and interdicting the appellant from giving effect to the notice, pending the outcome of a review application that was yet to be brought, in which additional relief would D be sought. The application came before a full bench of the North Gauteng High Court (Southwood J, Murphy J and Raulinga J). One of the grounds upon which it was said by the respondents that the notice was invalid was that reg 22C(1), under which the notice was issued, was said itself to be invalid because it was not in conformity with the E authorising statute. In the course of argument in the court below counsel for both parties agreed that, if the court were to uphold the respondents' contention in that respect, then a final order should be made that the notice was invalid. Having found in their favour, the court below made an order accordingly and the prayer for interim relief became superfluous. With the leave of that court the appellant now appeals against that order. F

[4] An appeal lies against an order that is made by a court and not against its reasons for making the order. It follows that on appeal a respondent is entitled to support the order on any relevant ground and is not confined to supporting it only for the reasons given by the court G below. [2] In this court the respondent did not seek to support the order on any ground other than that, given by the court below, which was that the regulation under which it was made did not conform to the authorising statute and was thus invalid, subject to one subsidiary issue that I will come to. This means that the principal issue on which the appeal turns H is whether the full bench was correct in its conclusion on the invalidity of reg 22C(1) for the reasons that it gave. If the respondent fails on that issue and on the subsidiary issue that I referred to, then the order that it made falls to be set aside, and the challenge to the validity of the order falls to be dismissed. The remainder of the notice of motion did no more I

Leach JA

A than foreshadow a review application that was yet to be brought and need not concern us.

[5] The regulations were made under the powers extended to the Governor-General (later the State President and now the President) by s 9 of the Act, which, inter alia, provides -

B '(1) The (President) may make regulations in regard to any matter directly or indirectly relating to or affecting or having any bearing upon currency, banking or exchanges.

(2)(a) Such regulations may provide that the (President) may apply any sanctions therein set forth which he thinks fit to impose, whether civil or criminal.

C (b) Any regulation contemplated in paragraph (a) may provide for -

(i)

the blocking, attachment and obtaining of interdicts for a period referred to in paragraph (g) by the Treasury and the forfeiture and disposal by the Treasury of any money or goods referred to or defined in the regulations or determined in terms of the regulations or any money or goods into which such money or goods have been D transformed by any person, and -

(aa)

which are suspected by the Treasury on reasonable grounds to be involved in an offence or suspected offence against any regulation referred to in this section, or in respect of which such offence has been committed or so suspected to have been committed;

(bb)

E which are in the possession of the offender, suspected offender or any other person or have been obtained by any such person or are due to any such person and which would not have been in such possession or so obtained or due if such offence or suspected offence had not been committed; or

(cc)

by which the offender, suspected offender or any other person F has been benefited or enriched as a result of such offence or suspected offence -

Provided...