Saleh v South African Reserve Bank and Another (1843/2022) [2024] ZAWCHC 13 (26 January 2024)

IN THE HIGH COURT OF SOUTH AFRICA
WESTERN CAPE DIVISION, CAPE TOWN
In the matter between:
GAMAL ABDEL WAHAB E MOSELH Y SALEH
and
SOU TH AFRICAN RESERVE BAN K
MINISTER OF FINANCE
Andrews AJ
Introduction
JUDGMENT
[REPORTABLE]
Case Numbe r: 1843/2022
Plaintiff
First Defendant
Second Defendant
[1] This is an opposed interlocutory application instituted by the First Defendant
who raises an exception against the Plaintiffs Particulars of Claim on the basis that it
lacks the necessary averments to sustain a cause of action.
Background Facts
[2] The Plaintiff received a Forfeiture Notice from the First Defendant ("SARB")
dated 03 August 2022 . in terms of Regulation 22B of the Exchange Control
Regulations of 1961 ("ECR ").1 The Plaintiff was advised in terms of the copy
"Staatskoerantn attached thereto, dated 2 August 2022, that amounts of
R1 011 862.59 and R77 431.92 held at First Rand Bank Limited and ABSA Bank
Limited, respectively, had been forfeited to the State and would be disposed of by
deposit to the National Reserve Fund. 2
1 Index: Annexure "M GS 1", page 12,
'Notice and Order of Forfeiture in terms of the provision of Regulation 22B of the
Exchange Control Regulations, 1961 ...
In compliance with the provisions of Exchange Control Regulation 228 (3)(b), kindly find
attached hereto a copy of the Notice and Order of Forfeiture (Notice No. 1193 of 2022),
published in Government Gazette number 47181 on 2022-08-02.
Kindly note that in terms of the Exchange Con trol Regulation 220, any person who feels
aggrieved by a decision under Exchange Control Regulation 228 to forfeit monies to the State,
may , at any time, but not later than 90 days from the date of the publication of the Notice and
Order of Forfeiture in question, institute an action in a competent court for the setting aside of
such decision.'
2 Index: Staatskoerant, 2 Augustus, No . 47181, pages 13-14.
'Notice and Order of Forfeiture
Notice of Forfeiture to the State of money in terms of the provisions of Exchange Control
Regulation 228 made under Section 9 of the Currency and Exchanges Act, 1933 .. .in respect
of:
Mr Gama/ Abdel Wahab El. Mose/hy Saleh
of:
Be pleased to take notice that:
1. The Minister of Finance has, by virtue of the provisions of Exchange Control Regulation
22E delegated all the functions and/or powers conferred upon the Treasury by the
provisions of the Exchange Control Regulations [with the exception of the functions and/or
powers conferred upon the Treasury by Exchange Control Regulations 3(5) and (8), 20 and
22 but which exception does not include the functions and/or powers under Exchange
Control Regulations 22A, 228, 22C and 22D}, and assigned the duties imposed thereunder
on the Treasury, to, inter alia, the Governor or the Deputy Governor of the South African
Reserve Bank.
2
[3] On or about 28 October 2022 the Plaintiff instituted action against the
Defendants. According to the Particulars of Claim, the Plaintiff alleged that the
decision as set out in paragraph 2 above, individually and collectively is wrongful and
unlawful, and in violation of Plaintiff's proprietary and/or other rights to the mon ies
forfeited to the State. Additionally, it is averred that in accordance w ith ECR 22D (b),
the impugned decision(s) fall to be set aside on grounds set out in section 9(2)(d)(i)
and/or (iii) of the Currency Exchanges Act, 1933.
[4] In further amplification, the Plaintiff averred that the decision to freeze Plaintiff's
bank accounts, and subsequently declare funds forfeited to the State is premised on
the wrong allegation and/or erroneous belief, and/or suspicion that Plaintiff trading as
G AW E M , contravened the provisions of the Exchange Control requirements in that
he is alleged to have, in and during the period 24 November 2014 to 16 February
2016, made advance payments in excess of R1m to foreign suppliers in respect of
wh ich goods to the value of approximately R 74 000.00 was , in turn, not cleared
through Customs and/or not within the period prescribed by law. The advance
payments, according to the Plaintiff was made by Jamal and Brothers CC , a juristic
2. By virtue of the functions, powers and/or duties vested in me , in my capacity as the Deputy
Go vernor of the South African Reserve Bank, in terms of the delegation and assignment of
the functions, powers and/or duties referred to in 1 above, I hereby give notice of a decision
to forfeit to the State the following mone y and I hereby declare and forfeit to the State the
following money , namely:
2.1 the amount of R1 011 862.59 being capital standing to the credit of M r Gama/ Abdel
Wahab El. Moselhy Saleh, in account number ... , held with FirstRand Ban k Limited,
together with any interest thereon and/or other accrual thereto.
2.2 The am ount of R 77 431.92 being capital standing to the credit of Mr Gama/ Abdel
Wahab El. M ose/hy Saleh, in account number ... , held with Absa Bank Limited, together
with any interest thereon and/or other accrual thereto.
3. The date upon wh ich the m oney specified in 2 above is hereby forfeited to the State is the
date upon which this N otice of Forfeiture is published in this Gazette.
4. The money specified in 2 above shall be disposed of by deposit to the N ational Revenue
Fund.
5 . This N otice also constitute a w ritten order, as contemplated in Exchange Control
Reg ulation 22B, in term of w hich the money specified in 2 above is hereby forfeited to the
State ... '2
3
entity separate and distinct from Plaintiff, which entity has no rights or claims to any of
the mon ies declared forfeited to the State. The Plaintiff furthermore alleged that it
cannot, as a m atter of fact and/or in law be held liable under the ECR for any violation
thereof which m ay have been committed by Jamal Brothers CC.
[5] The Plaintiff is seeking the following relief against the First and/or Second
Defendant as am ended include the following:
(a) An order under Exchange Control Regulation 22D(b) setting aside the decision
to declare Plaintiffs monies forfeited to the State;
(b) An order directing First Defendant to repay to Plaintiff the aggregate sum of
R1 089 294.51 plus interest at the prescribed legal rate a tempora m orae to
date of payment, both days included. And/or, an order directing the First
Defendant to take all necessary steps to recover the aforementioned sum of
R1 089 294.51 plus interest from the National Revenue Fund under the
administrative control and/or authority of the Second Defendant;
(c) Costs of suit on Attorney-client scale if this action is defended;
(d) Such further and/or alternative relief as this Court deem s fit.
Grounds of Exception
(6] The First Defendant takes exception to the Plaintiffs Particulars of Claim on the
grounds that it lacks the necessary averments to sustain a cause of action. The
grounds of exception are set out in the N otice of Exception can be abridged as
follows:3
(a) The Plaintiff has failed to describe GAWEM properly or at all, and cited the
incorrect registration number for Jamal and Brothers Fashions CC , the incorrect
number being 2006/025108/23.
(b) The Particulars of Claim lack a cause of action because in terms of section 22A
of the ECR , the Treasury may attach any money or goods which are reasonably
suspected to constitute a contravention, or which money or goods would not
have been obtained had there not been a contravention, or by any person who
has benefited or been enriched as a result of such contravention, or in
possession of any person.
3 Excipient's Heads of Argum ent, para 10, pages 8 - 9.
4
(c) The Plaintiff is the sole member of Jamal and B rothers Fashions CC . The
attempt by the Plaintiff to rely on the separate juristic personality of Jamal and
Brothers Fashions CC is bad in law because the ECR extend beyond the
person suspected of the contravention to include those who benefitted from the
contravention or those who are in possession of the funds.
[7] The relief sought by the Excipient include that:
(a) The First Defendant's exception(s) is/are upheld;
(b) The Plaintiff's claim is dismissed;
(c) Further and/or alternative relief; and
(d) Costs of the exception on the scale as between attorney and client.
Plaintiff's grounds of opposition
[8] The salient grounds upon which Plaintiff submitted that the exception falls to be
dismissed include inter alia that the:
(a) exception fails to comply with Rule 23(3) in that the notice does not "clearly and
concisely" state the grounds on which the Particulars of Claim is excipiable;
(b) causes of action as pleaded are recognised in law and
(c) exception taken is bad in law on the merits.
Issues for determination
[9] The issues for determination can be summarised as follows:
(a) Whether there has been compliance with Rule 23(3);
(b) Whethe r the Excipient is permitted to anchor its exception on points of law and
(c) Whether the Particulars of Claim mak e the necessary averments to sustain the
Plaintiff's causes of action?
Legal Principles
[1 O] The test for an exception is firmly established in our law. It is trite that exceptions
are raised in an attempt to avoid the leading of unnecessary evidence at the hearing
5
of the action.4 An overview of the applicable general principles distilled from case law
is succinctly set out in Living Hands (Pty) Ltd NO and Another v Ditz and Others5,
where Makgoka J, encapsulated the general principles applicable to exceptions.
'[15] Before I consider the exceptions, an overview of the applicable general
principles distilled from case law is necessary:
(a) In considering an exception that a pleading does not sustain a cause of
action, the court will accept, as true, the allegations pleaded by the plaintiff
to assess whether they disclose a cause of action.
(b) The object of an exception is not to embarrass one's opponent or to take
advantage of a technical flaw, but to dispose of the case or a portion thereof in
an expeditious manner, or to protect oneself against an embarrassment which
is so serious as to merit the costs even of an exception6.
(c) The purpose of an exception is to raise a substantive question of law which
may have the effect of settling the dispute between the parties. If the exception
is not taken for that purpose, an excipient should make out a very clear case
before it would be allowed to succeed. 7
{d) An excipient who alleges that a summons does not disclose a cause of
action must establish that, upon any construction of the particulars of claim, no
cause of action is disclosed. 8
4 Number Two Piggeries (Ply) Ltd v City of Tshwane Metropolitan Municipality In re: City of Tshwane
Metropolitan Municipality v Number Two Piggeries (Pty) Ltd (2081/2021) [2022] ZAGPPHC 274 (21
April 2022)
'[6] The law pertaining to exceptions is trite. The aim of exception procedures is to avoid the leading
of unnecessary evidence and to dispose of a case wholly or in part in an expeditious and cost effective
manner ... '
5 (42728/2012) [2012] ZAGPJHC 218; 2013 (2) SA 368 (GSJ) (11 September 2012) at para 15; See
also Merb (Ply) Ltd and Others v Matthews 2021 ZAGP JHC 693 (16 November 2021), at para 8;
Number Two Piggeries (Ply) Ltd v City of Tshwane Metropolitan Municipality In re: City of Tshwane
Metropolitan Municipality v Number Two Piggeries (Pty) Ltd (2081/2021) [2022] ZAGPPHC 274 (21
April 2022) paras 6 - 12
6 Barclays Bank International Ltd v African Diamond Exporters (Ply) Ltd (2) 1976 (1) SA 100 rN).
7 Van der Westhuizen v Le Roux 1947 (3) SA 385 (C) at 390.
8 Fairoaks Investments Holdings (Ply) Ltd v Oliver 2008 ( 4) SA 302 (SCA) at para [ 12].
6
(e) An over-technical approach should be avoided because it destroys the
usefulness of the exception procedure, which is to weed out cases without legal
merit.9
(f) Pleadings must be read as a whole and an exception cannot be taken to a
paragraph or a part of a pleading that is not self-contained. 10
(g) Minor blemishes and unradical embarrassments caused by a pleading can
and should be cured by further particulars.11'
Legal Framework
[11] Rule 23(3) states that:
'Whenever an exception is taken to any pleading, the grounds upon
which the exception is founded shall be clearly and concisely stated'
[12] The Plaintiff identified the subsequent shortcomings in the Notice of Exception
by the First Defendant12:
(a) No mention is made of the facta probanda to be pleaded for a claim based on
ECR 22D(b) read with ECR 228 , nor for a claim based on unjust enrichment,
in other words, the Excipient failed to identify what facts were not pleaded;
(b) The Notice of Exception does not specify which essential factual averments are
lacking to sustain a claim based on ECR 22D(b) read with ECR 22B , nor for a
claim based on unjust enrichment, in other words, that the Excipient failed to
make the submission that they pleaded insufficient facts;
(c) The Notice of Exception is essentially a restatement of what is pleaded;
9 Telematrix (Pty) Ltd tla Matrix Vehicle Tracking v Advertising Standards Authority SA 2006 (1) SA 461
(SCA) at para 3 where Harms JA distils the general approach to exceptions as follows:
'Exceptions should be dealt with sensibly. They provide a useful mechanism to weed
out cases without legal merit. An over-technical approach destroys their utility. To
borrow the imagery employed by Miller J, the response to an exception should be like
a sword that cuts through the tissue of which the exception is compounded and
exposes its vulnerability.'
See also Erasmus Superior Court Practice, Second Edition (Juta), D1 -294 [SERVICE 4, 2017], H v
Fetal Assessment Centre 2015 (2) SA 193 at 19988 .
10 Jow ell v Bramwell-Jones and Others 1998 (1) SA 836 0/IJ) at 902 J.
11 Jowell (supra) at 900 J; See also Purdon v Muller 1961 (2) SA 211 (A) at 214 e - 215.
12 Index: First Defendant's Exception, paras 1 - 3, pages 20 -21 .
7
(d) The Excipient failed to cite any authority that supports the submission that the
facta probanda and facta probantia is irrelevant;
(e) The Plaintiff highlighted that the grounds on which the Excipient roots its
Exception is based on points of law. 13 The Plaintiff contended that the Excipient
was required to present a factual challenge to the Particulars of Claim.
(13) It was argued that the non-compliance with the prescriptive provisions of Rule
23(3) w ill be fatal to an exception unless condonation is applied for and granted. In
this regard, it was contended that the Excipient did not make any application for
condonation as envisaged in E vergrand Trading (Pty) Ltd14.
(14] It is trite that the Excipient is to specify why it avers that the facts pleaded by
the Plaintiff are insufficient. The Excipient therefore bears the onus to make out a clear
case before it would be allowed to succeed. In other words, could the facts pleaded
by the Plaintiff result in a judgment being granted against the Defendant as enunciated
in First National Bank of Southern Africa Ltd v Perry NO and Others15 where the
following was held:
'It is trite that an exception that a cause of action is not disclosed by a pleading
cannot succeed unless it be shown that ex facie the allegations made by a
Plaintiff and any other document upon which his or her cause of action may be
based, the claim is (not may be) bad in law. "An exception sets out why the
excipient says that the facts pleaded by a plaintiff are insufficient. Only if the
facts pleaded by plaintiff could not, on any basis, as a matter of law, result in a
judgment being granted against the cited defendant, can an exception
succeed. Only those facts alleged in the particulars of claim and any other facts
agreed to by the parties can be taken into account".'
[15] The Excipient, contended that its Exception was succinct and to the point, and
that the Plaintiff ought to have filed an irregular step notice, which was not done. It is
trite that in terms of Rule 30 of the Uniform Rules of Court, a party to a cause in which
any other party has taken an irregular step may apply for the Court to set aside such
13 Index: First Defendant's Exception. para 4, pages 21 -23.
14 (54068/2020) (2022] ZAGPPHC 739 (3 October 2022) para 57.
15 [2001) 3 All SA 331 para 6.
8
step. The Excipient made this submission w ithout having raised it in the Notice of
Exception. As a result, l consider it unnecessary to address this point in the course of
this judgement.
[16] The question therefore to be answered is whether the Excipient has explicitly
and concisely stated the grounds upon w hich the exception is founded. I am m indful
that in matters where the exception is based on an absence of a cause of action, the
court is beholden to deal w ith the exception sensibly and reasonably, not in an over­
technical manner as set out in the guidelines formulated in Number Two Piggeries
(Pty) Ltd v City of Tshwane Metropolitan Municipality In re: City of Tshwan e
Metropolitan Municipality v Number Two Piggeries (Pty) Ltd16.The court is
required to evaluate, whether upon reading of the pleadings in its entirety the claim
has been formulated in a manner that allows the Defendant to ascertain clearly what
the case against it is and should enable the Defendant to plead to it.17
(17] A substantial portion of the Excipient's Notice of Exception seems to be a
paraphrased restatement of the key allegations found in the Plaintiffs Particulars of
Claim, specifically paragraphs 4.1 to 4.5, in order to support the claim that the
Particulars of Claim do not contain the necessary averments to maintain a cause of
action in accordance with ECR 22D(b) read with ECR 22B .18 The Excipient has framed
the Notice in a manner that seeks to set out the legislative framework of the EC R in
an endeavour to illustrate the basis for which it alleges that the Plaintiff's claim lacks
a cause of action. It is manifest that upon a plain reading of paragraphs 4.2 and 4.4 of
the Exception, that the interpretation of the import and legal effect of Regulations 22A
and 22C of the ECR is recorded as dealt with in paragraphs 4.1 and 4.3.
16 (2081/2021) [2022] ZA G PP HC 274 (21 A pril 2022), para 12 'If the exception is based on an absence
of a cause of action the court should deal with the exception sensibly and not in an over-technical
manner. Although one should not be overly technical and read the pleading as a who le the claim should
be formulated in a way that allows the defendant to ascertain clearly what the case against it is and
should enable the defendant to plead to it.'
17 Number Two Piggeries (Ply) Ltd (supra) at para 12.
18 Index: Exception, pages 20 - 23.
9
[18] The authorities reaffirm the trite legal principle that interpretation of statutes is
a matter of law and not fact, and as such that responsibility rests with the courts to
determine.19 It is an established legal principle, that conclusions of law need not be
pleaded. 20 The contents of paragraphs 4.2, 4.4 of the Exception and paragraph 4.5 of
the Exception which reads:
'The attempt by the Plaintiff to rely on the separate juristic personality of Jamal
and Brothers Fashion CC is not only bad in law because the Exchange Control
Regulations extend beyond the person suspected of the contravention to
include those who benefitted from the contravention, or those who are simply
in possession of the funds, but also the plaintiff is the sole member of Jamal
and Brothers Fashion CC . A copy of a CIPC dated 6 December 2022 is
attached marked annexure "E1 ". ',
viewed in isolation, may appear to be non-compliant with the prescripts of Rule 23(3),
as secondary allegations are encapsulated in support, which ordinarily ought to be
matters for evidence as conclusions of law need not be pleaded. However , it is evident
that these secondary submissions are made , in my view, to carry the points of law
upon which the exception is grounded; which cannot be made in a vacuum as will be
demonstrated later in this judgment. This court is cognizant that pleadings must be
19 KPMG Chartered Accountants (SA) v Securefin Ltd and Another 2009 (4) SA 399 (SCA) para 39.
20 The approach to an exception was considered by McCreath J in the decision of Trope v South African
Reserve Bank 192 (3) SA 208(T) at 211, which was cited with approval by Heher J in the decision of
Jowell v Bramwell Jones and Others 1998 (1) SA 836 (W), where the court laid out the following general
principles regarding exceptions:
"(a) minor blemishes are irrelevant;
(b) pleadings must be read as a whole; no paragraph can be read in isolation;
(c) a distinction must be drawn between the facta probanda, or primary factual
allegations which every plaintiff must make, and the facta probantia, which are the
secondary allegations upon which the plaintiff will rely in support of his primary factual
allegations. Generally speaking, the latter are matters for particulars for trial and even
then are limited. For the rest, they are matters for evidence;
(d) only facts need be pleaded; conclusions of law need not be pleaded;
(e) bound up with the last-mentioned consideration is that certain allegations expressly made
may carry with them. implied allegations and the pleading must be so read: cf Coronation Brick (Pty)
Ltd v Strachan Construction Co (Pty) ltd 1982 (4) SA 37 1 (D) at 377, 3798. 3790- -H. • at 9021 -
9030"
10
read as a whole and that no paragraph is to be read in isolation. Caution has been
expressed regarding an excessively technical approach that renders the exception
procedure ineffective and should be avoided. The contextual framework to support the
averment that the Plaintiff's claim lacks a cause of action, appears to have informed
the manner in w hich the Excipient has chosen to couch the N otice of Exception.
However, the style chosen by the Excipient, does not, in my view, render the Notice
of Exception to be defective when applying the approach envisaged in the guiding
principles on exceptions.
[19] It is important to mention, however, that the Excipient seeks to reference the
CIPC printout that constitutes extraneous evidence, which is not envisaged in Rule
23(3).21 In my view, this annexure does not advance the case of the Excipient for the
purposes of the exception as the Court is to have regard to the pleadings as it stands.
The said attachment is a matter of evidence and may be introduced at a later stage. It
is trite that where an exception is taken the court will look only to the pleadings
excepted as it stands and not to facts outside those stated in it. 22 Therefore, the
veracity of the allegations made in the impugned pleadings is to be accepted. Put
simply, the court is called upon to adjudicate and assess the facts as per the pleadings.
Consequently, the C IPC printout falls to be struck out and will be ignored for the
purposes of this application.
[20] It was argued that a different consideration is applied in respect of an exception
raised on a Plaintiff's Particulars of Claim vis-a-vis a Plea. Where a pleader raises a
point of law that can be destructive of the case then a special plea can be raised. In
casu no plea has yet been filed. The Plaintiff argued that the door is effectively not
closed on the Excipient if the objectionable grounds are sustainable, as recourse may
be had by way of raising a special plea, which could potentially be dipositive of the
matter. If the grounds are sustainable, then the recourse is to raise a plea or a special
plea.
21 Index, CIPC , Ann exure "E 1", page 26.
22 In Baliso v FirstRand Bank Ltd t/a W esbank22, it w as held that '[w]here an exception is taken a court
looks only to the pleadings excepted to as it stands, not to facts outside those stated in it'.
11
[21] Whilst it is so that a special plea may be raised, the question to be answered at
this stage is whether Particulars of Claim, as it stands, has been formulated in such a
way as to enable the Excipient to plead to it.
Introduction of new grounds
[22] It is a fundamental legal principle that deficiencies in the Notice of Exception
cannot be cured by way of amplification at the hearing, and neither can it raise any
new ground of exception in its Heads of Argument which was not raised in its formal
Notice of Exception. The court is also precluded from evaluating the Heads of
Argument in regard to factual admissions that are not supported by the pleadings. It is
furthermore trite, that the Excipient cannot expand its grounds of exception through
submissions in Heads of Argument.
[23] The Plaintiff argued that the Excipient introduced a new ground in the Heads
of Argument that was not pleaded, extending it beyond the realm of Rule 23(3). The
Excipient in its Heads of Arguments make the following submission:
'While it is not conceded that the plaintiff did not partake in a contravention of the
Regulations, the plaintiff has in any event not pleaded that the money concerned was
acquired by him bona fide for reasonable consideration as a result of a transaction in
the ordinary course of business'23
[24] The question to be answered is whether this point is contained in the Notice of
Exception or does it extended beyond the realm of Rule 23(3) if regard is had to
paragraph 4.2 of the Notice of Exception wherein the following is stated:
'4.2 This means that an attachment can take place regardless of
wrongdoing by a specified person or entity and the mere possession of the
funds concerned would be sufficient where there is a reasonable suspicion of
a contravention of the Exchange Control Regulations, just as is the case at
hand, among other things (this is not a concession that the plaintiff did not
partake in the contravention of the Exchange Control Regulations) ... '24
23 First Defendant's I Excipient's Heads of Argument, para 13, page 13.
24 Index: First Defendant's Exception, para 4.2. page 22.
12
[25) It is apparent that the portion not contained in the Notice of Exception is the
following:
"that the money concerned was acquired by him bona fide for reasonable
consideration as a result of a transaction in the ordinary course of business". 2s
[26) The pivotal consideration is whether this constitutes an expansion of the
grounds or should it be regarded as an amplification of the ground contained in para
4.2. In light of the conclusion to which I have come, I am not persuaded that this
averment constitutes a new ground, or expansion of the ground pleaded. Though it is
trite that grounds are to be concisely set forth, I am of the view, that same amounts to
amplification as the Plaintiff alleges that he seeks relief based on two causes of action
pleaded namely:
(a) relief under the ECR ; alternatively,
(b) at common law based on unjustified enrichment which will be dealt with later in
this judgment.
[27) The Plaintiff argued that the Excipient's reliance on the principle of subsidiarity,
which was introduced in the Heads of Argument, is not a recognised ground of
exception. This contention extends beyond the grounds of exception specified in the
Notice of Exception. The Excipient explained that the subsidiarity principle was
invoked because of the submissions made by Plaintiff in Heads of Argument pertaining
to unjust enrichment. The Excipient challenges the Plaintiff's alternative common law
claim in terms of the principle of subsidiarity on the basis that if there is a legislative or
statutory remedy or mechanism provided, a litigant cannot rely on the common law
remedy. It is the Excipient's view, that the Plaintiff is essentially relying on this remedy
on the premise that if it is not successful with the statutory remedy, the court is called
upon to read in that the Plaintiff has a common law remedy.
[28) In My Vote Counts NPC v Speaker of the National Assembly and Others26
provides guidelines on the court's approach to the principle of subsidiarity:
25 Excipient's Heads of Argument , para 13.
26 (CCT121/14) [2015) ZACC 31 (30 September 2015) at para 54.
13
'The principle of subsidiarity is a well-established doctrine within this Court's
jurisprudence. The essence of the principle was captured by O 'Regan J in
Mazibuko, where she held that-
"where legislation has been enacted to give effect to a right, a litigant
should rely on that legislation in order to give effect to the right or
alternatively challenge the legislation as being inconsistent with the
Constitution. "27
[29] The judgment of B ato Star Fishing (Pty) Ltd v Minister of En vironm ental
A ffairs28 as referenced in an article 'Adjudicative subsidiarity, the "horizontality
simpliciter" approach and personality rights: Outlining an integrated and constitutional
reading strategy to the law of personality', endorses the approach that 'expressly
enacted legislation "cannot be thoughtlessly circumvented" to establish a cause of
action in terms of the common law or customary law. '29
[30) As indicated previously, the Excipient is confined to the pleaded grounds of
exception as the substance of the exception was amplified in the Excipients Heads of
Argument. The legal principle pertaining to subsidiarity was not specifically mentioned
but could be implied because the Excipient raises a point of law to support its
contention that no cause of action has been pleaded. This court acknowledges that
the Excipient is required to provide clear and concise justifications for exempting
Particulars of Claim, and that these assertions should establish factual grounds.
27 Ma zibuko and Others v City of Johannesburg and Others (2009) ZACC 28; 2010 (4) SA 1 (CC); 201 0
(3) BCLR 239 (CC) at para 73. See also Mbatha v University of Zululand (2013) ZACC 43; (2014) 35
ILJ 349 (CC); 2014 (2) BCLR 123 (CC), where Jafta J stated:
"[W]here legislation has been passed to give effect to a right in the Bill of Rights, a
litigant is not permitted to rely directly on the Constitution for its cause of action."
28 2004 7 BCLR 687 (CC) .
29 Visser CJ 'Adjudicative subsidiarity, the "horizontality simpliciter" approach and personality rights:
Outlining an integrated and constitutional reading strategy to the law of personality' 2022 De Jure Law
Journal, pages 129 - 130:
'Building upon the first substantive proposition, the second substantive proposition, as originating from
the judgment of Balo Star Fishing (Ply) v Minister of Environmental Affairs, develops this line of
reasoning further by determining that such expressly enacted legislation "cannot be thoughtlessly
circumvented" to establish a cause of action in terms of the common law or customary law'
14
However, the Excipient merely outlines the statutory provisions that support the
Excipient's choice to publish the declaration of forfeiture. The law is clear that where
legislation has been enacted to give effect to that right, a litigant should rely on that
legislation. This court is attentive not to go outside the legislative provisions upon
which the Plaintiff places reliance. It is trite that in dealing with an exception, pleadings
are to be looked at as a whole. Therefore, I am of the view that subsidiarity principle
is a consideration to be ventilated at the trial, if regard is had to the legislative
framework upon which the Plaintiff places reliance read together with the quoted
authorities on point.
[31] Counsel for the Excipient argued in her address that the court should
contemplate the provision of nlternative relief. Counsel for the Plaintiff argued that no
alternative relief exists and that alternative relief in the case of an exception is not
permitted in law and is a deviation of the trite rules governing exceptions which is to
either uphold the exception on the grounds of no cause of action or dismiss the
exception and direct that the Defendant files its plea.
[32] It is trite that an Excipient is obliged to confine his complaint to the stated
grounds of its exception. 30 The Excipient has to stand or fall by the exception as
formulated in its notice filed.31An exception which lacks a prayer is bad, but the court
has the power to order an amendment to make good the defect, provided no prejudice
or injustice is thereby caused to the Respondent.32 In applying the entrenched legal
principles, I am not inclined to consider any alternative relief that was not pleaded with
particular particularity, as the Excipient does not state what alternative relief should or
could be granted by the Court. Doing so would be contrary to the established legal
30 TS/ Communications CC v Omega M Projects (2022/13169)[2023]ZAGPJHC 1081 (27 September
2023) at para 7.
31 lnkin v Borehole Drillers 1949 (2) SA 366 (A) at 373; Alphina Investments Ltd v Blacher 2008 (5) SA
479 (C) at 483D ; TS/ Communications CC and Omega M Projects (Case no. 13169/2022) [2023]
ZAGPPHC (27 September 2023) para 7 'The trite principle of our law is that an excipient is obliged to
confine his complaint to the stated grounds of his exception.'.
32 Erasmus HJ 'Superior Court Practice' 2nd Ed . Vol 2(Juta) Rule 23, D1-309.
15
principles regarding exceptions; more especially as the key consideration is that of
prejudice. 33
[33J In addition, Counsel for the Plaintiff also challenged the submission made on
behalf of the Excipient during argument that the Plaintiff has not challenged the
constitutionality of the Regulations. This too, was not pleaded in the Notice of
Exception. Consequently, this Court, will for the purposes of this judgment not deal
with these submissions as it was not raised as a ground of exception in the Notice of
Exception.
[34J It was argued that the Plaintiff's submission in its Heads of Argument that "[t]he
factual averment raised by First Defendant's Counsel in her heads at par 13 may be
raised as a defence in a Plea, namely, that the money declared forfeited was not
acquired bona fide", are to be regarded as a concession of the taint.34 The Plaintiff
however contended that this is not an admission. In this regard, the Plaintiff illuminated
the wording in the Particulars of Claim namely:
'18.3 Plaintiff cannot, as a matter of fact and/or law, be held liable under the
Exchange Control Regulations. ~or an_y violation thereof which may (my
emphasis) have been committed by Jamal and Brothers CC '35
[35] It is prudent to reiterate that the court shall consider only the pleadings excepted
as it stands. Heads of Argument are not pleadings. In any event, it is not incumbent
on the court dealing with an exception to analyse any defences raised.
The Exchange Control Legislation
[36] The Constitutional Court in South African Reserve Bank and Another v
Shuttleworth and Another36 explains the purpose and historic origin of the ECR. The
33 Living Hands (Pty)Ltd v Ditz 2013(2) SA368 (GSJ) at 394 D-E; University of the Free State v
Afriforum 2017(4) SA283 (SCA ) at 296E-F. •
3-< Plaintiff's Heads of Argument. para 65, page 15.
35 Index: Particulars of Claim, para 18.3, page 9.
36 2015 (5) SA 146 (CC) at paras 53 - 54.
16
matter of Yan Ling International Trade CC v South African Reserve Bank 37 is
instructive with regards to the ECR. It is the Plaintiffs contention that an Exception
'Here we are dealing with exchange control legislation. Its avowed purpose was to
curb or regulate the export of capital from the country. The very historic origins of the
Act, in 1933, were in the midst of the 1929 Great Depression, pointing to a necessity
to curb outflows of capital. The Reg ulations were then passed in the aftermath of the
economic crises following the Sharpeville shootings in 1960. The domestic economy
had to be shielded from capital flight. Regulation 1 O's very heading is "Restriction on
Export of Capitar. The measures were introduced and kept to shore up the country's
balance of payments position. The plain dominant purpose of the measure was to
regulate and discourage the export of capital and to protect the domestic economy .
This dominant purpose may also be gleaned from the uncontested evidence of the then
Director-General of Treasury, Mr Kganyago. He explained that the exchange control
system is designed to regulate capital outflows from the country. The fickle nature of
the international financial environment required the exchange control system to allow
for swift responses to economic changes. Exchange control provided a framework for
the repatriation of foreign currency acquired by South African residents into the South
African banking system. The controls protected the South African economy against
the ebb and flow of capital. One of these controls, which we are here dealing with
specifically, served to prohibit the export of capital from the Republic (unless certain
conditions were complied with).'
37 [2023] ZAGPPHC 79 (13 February 2023) at paras 3 -5.
'By way of background, the Respondent is the central bank of South Africa and was
established in terms of section 9 of the Currency and Banking Act, 31 of 1920. It is
recognised in section 223 of the Constitution of the Republic of South Africa ("the
Constitution") and is governed by the Constitution and South African Reserve Bank
Act, 89 of 1990 ("the SARB Act").
Section 3 of the SARB Act details the Respondent's legislative objectives, and it enjoins
it to do the following:
"In the exercise of its powers and the performance. of its duties the Bank shall
pursue as its primary objectives monetary stability and balanced economic
growth in the Republic, and in order to achieve those objectives the Bank shall
influence the total monetary demand in the economy through the exercise of
control over the money supply and over the availability of credir'.
The primary object of the Responden t. which is set out in section 224(1) of the
Constitution, "is to protect the value of the currency in the interest of balanced and
sustainable economic growth in the Republic". Exchange controls are government­
imposed limitations on the purchase and sale of foreign currencies. They are used to
ensure the stability of an economy and prevent exchange rate volatility.'
17
cannot be looked at through the lens of the law. It is therefore apposite to consider
the substance of the exception within the context of the ECR as the primary ground
on which the Excipient roots its exception is based on points of law.
[37] It is trite that the purposes of an exception is to raise a substantive question of
law which may have the effect of potentially settling the dispute between the parties. 38
The Court was referred to the relevant provisions encapsulated in Section 9(1) to
9(2)(c)39; 9(2)(d)(i)(aa) to (cc) read with 9(2)(d)(iii)(aa) to (cc) 40 of the Currency
38 Van der Westhuizen v Le Roux 1947 (3) SA 385 (C) at 390; see also Merb {Pty) Ltd v Matthews (supra), where
Mairer-Frawley quoted with approval from Makgoka J's decision in Living Hands (supra) as follows: '8 ... (c) The
purpose of an exception is to raise a substantive question of law which may have the effect of settling the dispute
between the parties. If the exception is not taken for that purpose, an excipient should make out a very clear
case before it would be allowed to succeed ... ort
39 '(1) The Governor-General 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 Governor-General may apply any sanctions
therein set forth which he thinks fit to impose, whether civil or criminal.
(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 fJOOds referred. to or defined in the regulations or
determined in terms of the regulations or any money or goods into which
such money or good have been t-ransformed by any person, and -
(cc) by which the offender, suspected offender or any other
person has been benefitted or enriched as a result of such offence
or suspected offence:
Provided that, in the case of ony person other than the offender or suspected
offender, no such money or goods shall be blocked, attached, interdicted,
forfeited and disposed of if such money or goods were acquired by such
person bona fide for reasonable consideration as a result of a transaction in
the ordinary course of business and not in contravention of the regulations;
and
(ii) in general, any matter with the State President deems necessary for the
fulfilment of the objectives and purposes referred to in subparagraph (i),
including the blocking, attachment, interdicting, forfeiture ond disposal
referred to in subparagraph (i) bv the Treasury of any other money or goods
belonging to the offender, suspected offender or any other person in order
to recover an amount equol to the value of the money or goods recoverable
in terms of the regulations refefred to in subparagraph (i), but which can for
any reason not be so recove-red.
(c) Any regulation contemplated in paragraph (a) may authorise any person who is
vested with any power or who shall fulfil any duty in terms of the regulation, to
delegate such power or to assign such duty, as the case may be, to any other
person.'
40 '{d) Any regulation contemplated in paragraph (a} shall provide-
(iJ that any person who feels aggrieved by any decision made or action taken by any person
in the exercise of his powers under 6 regulation referred to in paragraph (b) which has
the effect of blocking, attaching or interdicti'ng any money or goods, may lodge an
application in a competent court for the revision of such decision or action or for any
18
Exchanges Act41, as ame nded, to demonstrate that the Plaintiff can as a matter of law
be held liable by merely being in possession of the funds which are tainted. It w as
argued that even in instances where mone y is not tainted, funds can be recuperated
by way of attachment of funds. The Excipient submitted that it was incumbent upon
the Plaintiff to make the averment that the mone y is not tainted in light of the fact that
the P laintiff is challenging forfeiture. In amp lification, the Excipient submitted that it
was peremptory for the Plaintiff to have done so because it is a requirem ent that flows
from the ECR.
[38] The Excipient further contended that the Plaintiff has failed to plead that the
m oney concerned wa s acquired by him bona fide for reasonable consideration as a
result of a transaction in the ordinary coursP-of business as required in S ection
9(2)(b)(i)(cc) of the Currency and Exchanges Act. Section 9(2)(d)(i)(aa) to (cc) read
with 9(2)(d)(iii) (aa) to (cc) of the Currency and Exchanges Act sets out the basis upon
which an aggrieved person m ay challenge a forfeiture notice.
[39] The Plaintiff argued that Regulati.on 22D provides a remedy in the ECR for a
person aggrieved by the attachment or forfe/ture of funds and challenges the forfeiture
other relief, ond the court shofl not set aside such decision or oction or gront such other
relief unless it is satisfied-
(aa) that the person who made such decision or took such action did not act in accordance
with the relevant provisions of the regulation; or •
(bb) that such person did not have reasonable grounds to make such decision or to take such
action; or
(cc) that such grounds for the making of such decision or the taking of such action no longer
exist;
(ii) that the Treasury shall cause a notice to be published in the Gazette of any decision to forfeit
and dispose of any money or goods blocked, attached or interdicted in terms of the regulations referred
to in paragraph (b), and that a notice of such decision shall be sent simultaneously with
publication thereof in the Gazette by registered mail to any person who is, according to the
Treasury, affected by such decision or, if no address of such person is available, that such notice
shall be so sent to the last known address.of such person; and
(iii) that any person who feels aggrieved by any decision to forfeit and dispose of such money or
goods may, within a period prescribed by the regulations, which shall not be less than 90 days
after the date of the notice published in the Gpzette O!Jd referred to in subparagraph (ii), institute
/ego/ proceedings in a competent court for the setting aside of such decision, and the court shall
not set aside such decision unless it is satisfied-
(aa) that the person who made such decision did not act in accordance with the relevant
provisions of the" regulation; or
(bb) that such person did not hal(e grounds to make such decision; or
(cc) that the grounds for the making of such decision no longer exist.'
4 1 Act 9 of 1933.
19
of the money on the basis of the provision of Regulation 22D(d). The Plaintiff
contended that the minimum factual requirements have been satisfied, and as such,
he is entitled to the reiief specified in Regulation 22D(b), which stipulates the following:
'22D. Review of, or institution of actions in connection with, attachment
and forfeiture of certain money or goods , and certain orders. -Any person
who feels himself aggrieved by the attachment of any money or goods under
paragraph (a) of regulation 22A (1) or the issue or making of an order under
the provisions of paragraph (b) or (c) of regulation 22A or sub-regulation (2) of
regulation 22C or any condition imposed thereunder may :
(a) ...
(b) in the case or a decision under regulation 228 (1) or 228 (1), read with
regulation 22C (3), to forfeit to the State such money or goods, at any time
but not later than ninety days after the date of publication of the said notice
institute an action in a competent court for the setting aside of any such
decision,
and any such court may set aside any such attachment or order or decision, as
the case may be, on the grounds.set out in the provisions of paragraph (d) (i) or
(iii) of section 9 (2) of the Act.'
[40] The Excipient contended that the court should not be delayed by a trial in the
fullness of time as there is no cause of action. It would therefore be prudent to dissect
the Particulars of Claim in order· to establish whether a cause of action has been
disclosed on the law and whether the facts pleaded by the Plaintiff bear out the law
upon which reli~nce are placed.
Has a cause of action been disclosed?
[41) The primary ground of exception relied upon by the Excipient pertains to the
averment that the Particulars of Claim lack a cause of action.42 The Plaintiff subm itted
that the Particulars of Claim pleads two distinct causes of action to sustain his claim
for repayment of R1 089 294.51. The Excipient's contention is that the facts as
pleaded in the Particulars of Claim is not sufficient as it does not bear out a cause of
action in terms of the Regulations.
42 Index: First Defendant's Exception, para 5, page 23.
20
[42] The accepted legal principle is that c:1 litigant is required to plead material facts
that are necessary to support his right to jud~iment. The question remains whether all
the facta probanda have been pleaded. It is however, possible that pleading material
facts is inadequate to sustain a cause of action. Furthermore, if a litigant bases its
cause of action on legislative provisions, it is limited to relying on the mandatory
prescripts of the statute. Should this be the case, would this preclude the Plaintiff from
advocating for an alternative common law remedy, as is the situation in casu, thus
requiring a deviation from the principle of subsidiarity?43
[43] It is trite that a Defendant must know the case he needs to meet and plead to
it. If regard is had to the test on an exception this court is to determine whether on all
possible readings of the facts, no cause of action may be made out. It is trite, as
previously stated that it is for the Excipient to satisfy the court that the conclusion of
law from which the Plaintiff contends cannot be supported on every interpretation that
can be put upon the facts.44
[44] The matter of M cK enzie .v .Farmers' Co -operative Me at Industries Ltc:145
. . '
clearly defined meaning of a "cause.of.action" . .
' ... every fact which would be necessary for th.e plaintiff to.prove, if traversed, in . . . , .
order to support his right to ju_dgme1:t of th~ cou,rt. It does not comprise every
43 Uniform Rule 18(4) provides: "Every pleading shall contain a clear and concise statement of the
material facts upon which the pleader relies for. his claim, defence or answer to any pleading, as the
case may be, with sufficient parlicularity to enable the opposite party to reply thereto." : See also,
Alphedie Investments (Pty)Ltd v Greentops (Pty)Ltd 1975 (1) SA 161 (T) at 161 H ; McKenzie v Farmers'
Co-operative Meat Industries Ltd 1922.AD 16 at 23; Evins v Shield lnsorance Co Ltd 1980 (2) SA 814
(A) at 838E-F.
44 Theunissen v Transvaalse Lewende Ha~e K9op Beperk 1988 (2) SA 493 (A); Lewis v Oneanate
(Pty) Ltd and Another 1992 (4) SA 811 (A) at 817:- TS/ Communications CC v Omega M Projects
(2022/13169)[2023]ZAGPJHC 1081 (27 September 2023) at paras 3 - 4; H v Fetal Assessment Centre . . .. . .
2015 (2) SA 93 (CC) at 199B
'The test on an exception is whether, on all possible readings of the facts, no cause of
action may be made out. It is for the excipient to satisfy the court that the conclusion of
law from which the plaintiff cQnJef)dS C(iwnot-be suµported•o.n every interpretation that
can be put upon the facts.'
45 McKenzie v Farmers' Co-operative Meat Industries Ltd 1922 AD 16 at 23.
21
piece of evidence which is necessary to prove its fact, but every fact which is
necessary to prove. '
[45] It has been said that a charitable test is used on exception, especially in
deciding whether a cause of action is established. The pleader is entitled to a
benevolent interpretation.46 Furthermore, the c_ourt should not look at a pleading "with
a magnifying glass of too high power. "47 Although the approach on exception should
not be overly technical and that regard is to be had to the pleadings, which should be
read as a whole; it is pellucid that the claim should be formulated in a way that allows
the Defendant to ascertain clearly what the case against it is to enable the Defendant
to plead on it as elucidated in Number Two Piggeries (Pty) Ltd v City of Tshw ane
• I
Metropolitan Municipality In re: City of Tshwane Metropolitan Municipality v
Number Two Piggeries (Pty) Ltd 4s_
[46] The Excipient contended that Section 22A of the ECR permits the Treasury to
attach any money or goods which on reasonable grounds is suspected to constitute a
contravention, or which money or.goods··would have been obtained had there not been
a contravention, or by any person who has benefited or been enriched as a result of
such contraventiqn, or in possessiqn of .any pe_rson.4~
4s First National Bank Southern Africa v ,=:erry NO anct Others (supra) at 972 I - J; Britz v Coetzee 1967
(3) SA 570 (T) at 571A-B 'W hile the court should endeavour to look benevolently instead of over­
critically at a pleading, it should, however, not push that benevolence to the length of upholding a
summons , which as it stands discloses no cause of action; by altering its language, by reading into it
what is not there, and ignoring what is, and by thus making for the plaintiff a cause of action which he
has not himself put up.'
47 Kahn v Stuart and Others 1942 CPD 386.at 391,.
4s See fn 1 Number Two Piggeries (Pty) Ltd v City of Tshwane Metropolitan Municipality In re: City of
Tshwane Metropolitan Municipality v Numb er Two Piggeries (Pty) Ltd (ibid), para 12.
49 Section 22A states as follows:
'Attachment of certain money and goods, and blocking of certain accounts. - (1) Subject to the
provisions of the proviso to sub-paragraph (i) of paragraph (b) of section 9 (2) of the Act, the Treasury
may in such manner as it may deem fit:
(a) attach:
(i) any money or goods, notwithstanding the person in whose possession it is, in respect
of which a contravention of any provision of these regulations has been committed or
in respect of which an act·or omission has been committed which the Treasury on
22
reasonable grounds suspects to constitute any such contravention, or, in the case of
such money or any part thereof which has been deposited in any account, an equal
amount of money which is kept in credit in that account, and shall, in the case of money
attached, deposit such money in an account opened by the Treasury with an authorised
dealer for such purpose, and may , i(I the case of goods attached, leave such goods,
subject to an order issued or made under paragraph ( c), in the possession of the person
in whose possession such goods have been found or shall otherwise keep or cause it
to be kept in custody in such manner and at such place as it may deem fit;
(ii) any money or goods, notwithstanding the person in whose possession it is -
(aa) which the Treasury on reasonable grcunds suspects to be involved in a
contravention of any provision of these regulations or in a failure to comply with any
such provision, or which the Treasury on reasonable grounds suspects to be involved
in any act or omission which the Treasury so suspects to constitute a contravention of
any such provision or a failure to comply with any such provision;
(bb) which have been obtained by any person or are due to him, whether by virtue
of any personal right or otherwise, and which would not have been obtained by him or
would not have been due to him if any such contravention or failure or any such
act or omission had not been committed;
(cc) by_ which any ,person has_ been benefited or enriched as a result of any
such contravention or failure or any su.ch aqt or omission,
or, in the case of such money or any part thereof which has .been deposited in any
account, an equal amount of money wb_ich is held in credit in that account, and shall,
in the case of money attached, deposit such money in an account referred to in
subparagraph (i), and may , in the case of goods attached, leave such goods, subject
to an order issued or made under.paragraph (c), in the possession of the person in
whose possession such goods have been found or shall otherwise keep or cause it to
be kept in custody in such manner and_at sµch place as it may deem fit;
(iii) any money or goods, notwithstanding the p_erson, in whose possession it may be, into
which money or goods referred to in subparagraph (i) or (ii) have been transformed,
including any personal right obtained with money or goods referred to in subparagraph
(i) or (ii), or, in the case of such money or any part thereof which has been deposited
into any account, an equal amount of money which is held in credit in that account and
shall, in the case of money attached, deposit such money in an accou'?t referred to in
subparagraph (i), and may , in the case of goods attached, leave such goods, subject
to an order issued or made under paragraph (c), in the possession of the person
concerned in whose possessio.n such goods have been found or shall otherwise keep
or cause it to be kept in custody in such manner and at such place as it may deem fit;
(iv) any money which is held in a blocked account referred to in regulation 4 and which the
Treasury on reasonable grounds suspects to be money -
23
[47) Additionally, the Excipient argued that an attachment, based on the provisions
of Section 22A of the ECR , can take place regardless of wrongdoing by a specified
person or entity. The Excipient submitted that it was incumbent upon the Plaintiff to
make the averment that the money is not tainted in light of the fact that the Plaintiff is
challenging forfeiture, which is a peremptory requirement that flows from the ECR.
This beggars the question as to whether the absence of the averment regarding the
taint of the funds renders the Plaintiff's Particulars of C laim excipiable.
(48] The matter of Singh v South African Rese,ve Bank 50 clarifies situations in
which SARB suspects that a person has contravened the provisions of the
Regulations. Regulations 22A and 22C of tl1e ECR permits the SARB to issue a so
called "blocking order" which prevents that person from withdrawing funds from an
impugned bank account. The court explicated in Singh (supra) that Regulation 22A
allows for the issue of a blocking order in respect of funds tainted by the contravention,
(aa) in respect of which a 'confra'lention or act or omission referred to in
subparagraph (i) has been qommitted;
(bb) which has been involved in a contravention or failure or act or
omi?si~n referred to i~ ~ubparagra~h (ii)(aa);
(cc) which has been obtained by any person or is due to him as referred
subparagraph (ii)(bb);
to in
(dd) by which any person has been benefited or enriched as referred to in
subparagraph (ii)(cc);
(b) if the Treasury on reasonable grounds suspects that money referred to in paragraph
(a) has been deposited in any account and if it has not been attached under the said
• • I' .
paragraph (a), issue or make an order in such manner as it may deem fit in or by-24
- which any person is prohibited 'to withdraw or cause to be withdrawn, without the
permission of the Treasury and in acco'rdance with such conditions (if any) as may be
imposed by the Treasury, any money in that account or not more than an amount
determined by the Treasury, or to approp_riate in any manner any credit or balance in
that account, notwithstanding who may be the holder thereof;
(c) in the case of goods referred to in paragraph (a) which have been left in the possession
of the person concerned, issue or make an order in such manner as it may deem fit in
or by which any person is prohibited. to ,d!Jal, without .the permission of the Treasury
and in accordance with such condWons (if any) as may be imposed by the Treasury, in
any manner determined by the Treasury w ith the goods attached or any part thereof.
50 (2023] ZAGPPHC 112; 2020/35964 (20 Februar:y 2023).
24
while Regulation 22C applies to a blocking orde, in respect of funds which are as yet
untainted:
'{16] It is common cause that in terms of regulation 22A and/or regulation 22C
the SARB is empowersd to issue what is known as a 'blocking order' in terms
of which any person can be prohibited from withdrawing or causing to be
withdrawn any funds standing to the credit of that individual's account. The
decision to issue a blocking order is issued where there are reasonable
grounds to suspect that a person may have contravened the regulations.
Further, in terms of regulation 228, the funds blocked may be forfeited to the
State.
{17] In terms of regulation 22A the SARB can issue a blocking order relating to
tainted funds and in terms of regulation 22C untainted funds can be blocked.'
[49] It follows that the mere possession of funds would be sufficient where there is
a reasonable suspicion of a contravention of the ECR. It is trite that the ECR extend
beyond the person suspected of the contravention and includes those who benefited
as well as those who are in possession of the funds. The matter of Francis G eorge
Hill Family Trust v SA R eserve Bank 51 is instruc~ive on this point where the court
held:
'It is apparent from the aforesaid provisions that. the person in whose
possession monies are found need not himself have committed any
contravention of the regulations or have been involved, or be suspected of
having been involved, in any such contravention.
It is the money which is to be attached in respect whereof a contravention of
any provision of the regulations must have been committed, or in respect
whereof some act or omission has been committed which is suspected to
constitute such a contravention. Or it may be money which is suspected to have
been involved in any such contravention, or suspected to have been involved
in any act or omission which is suspected to constitute any such contravention.
It is therefore the money which must be "tainted".
51 1990 (3) SA 704 at pages 710G - H , read with 7110 .
25
It is apparent from the aforegoing provision that even money which is not
involved or suspected of having been involved in a contravention of the relevant
regulations may be attached, if it is required to enable the Treasury to recoup
the difference between the amount attached under reg 22A and the amount
actually involved or suspected to have been involved in the contravention or
suspected contravention of the latter regulations.'
[50] M oney which are not tainted m ay be used to recuperate the difference between
funds attached and the amount actually involved. It is however apposite to note that
this is not the facts of this case as there was no decision by SARB to recover a shortfall.
[51] The judicial relief being relied upon by the Plaintiff is based on Regulation
22D(b) of the ECR. In amplification, it was illuminated that the Plaintiff was informed
of his right to institute such a claim within 90 days as per MSG 1 attached to the
Particulars of Claim dated 3 August 2022. 52 The Plaintiff expressly pleaded reliance
on Regulation 220 in the Particulars of Claim wherein the following averment is made :
'17. In accordance with Exchange Control Regulation 220(b), the impugned
decision(s) fall to be set aside on grounds set out in section 9(2)(d)(i)
and/or (iii) of the Cwrrency Exchanges Act,· 1933. !53
[52] The Plaintiff further submitted that the conclusion of law has also been pleaded:
'19. In the premises, Plaintiff is entitled to judgment setting aside the
impugned decision(s) and an order directing First and/or Second Defendant to
pay Plaintiff the sums forfeited to the State as per paragraphs 2. 1 and 2. 2 of
the Notice marked MGS1 , together with interest thereon at the prescribed legal
rate as from the date on which the funds concerned are withdrawn from
Plaintiff's Absa Bank and First National Bank respectively for purposes of
payment to the National Revenue Fund. '54 •
[53] In Trope v South African_ Reserve Ban_k and Two Other Cases55 it was
stated:
52 Index: Exception, page 12.
53 Index: Particulars of Claim. para 17. page 8.
54 Index: Particulars of Claim, para 19, page 10.
55 1992 (3) SA 208 (T).
26
'A bare reference to a statute or set of regulations. without specifying the
particular section or regulation on which reli&oce is placed or the facts which
enable the section or regulation to be identified cannot in my view suffice, and
that must be so whether the statute or regulation on which reliance is placed
are the only facts relied upon to fix the defendant with liability or whether they
are but one of the factors to be considered m conjunction with any other facts
on which reliance is placed. '56
[54) As previously stated the Plaintiff has averred, that his claim is predicated on
Regulation 22D (b) and that Regulation 22A as well as Regulation 22C respectively
are irrelevant in the context of this matter. The Plaintiff submitted that no reliance is
placed or pleaded on Regulation 22A and 22C respectively; and more particularly the
Plaintiff is not challenging the blocking of the accounts. Although the Plaintiff submitted
that he does not challenge the blocking of the funds, the relief sought relates to the
decision to declare the Plaintiff's monies forfeited and the repayment of the funds
which were forfeited.
[55) The empowering provision· is• en·~apsulated in the Notice, namely Regulation
22B made ·under Section 9 of t~e Currency and Exchanges Act. The Plaintiff has . .
placed reli~nce on Regulation 22s' as is _borne out by the Particulars of Claim:
• , I •
'5. On or about 2 August 2022, the ,First and/or Second Defendant,
r~p~esented by its del~gate .• being the Deputy Governor of the First
Defendant, acting pursuant to powers granted by the provisions of
Exchange Control Regulations 228 made under section 9 of the
I • • • '
Currency and Exchanges Act 9 of 1933 as amended , published or
caused to be ·published =in Government Gazette No . 47181 a general
notice and order of forfeiture to 'the State if money owned by the
Plaintiff. '
[56] Regulation 22B deals With the forfeiture ·and disposal of money or goods in
respect of which orders have-been issued or ir.ade. The Notice in the Government
Gazette clearly was issued by the Treasury in keeping with Regulation 22B in respect
of which the Plaintiff was informed about the forfeiture to the state of the money
56 Page 211 E-G .
27
:•.
referred to in paragraph (a}, (b) or {c) of R€gulation 22A (1 ). The Plaintiff, in challenging
the forfeiture, makes the averment that he was the depositor of the funds and is entitled
to the benefits of ownership of the funds and submitted that the decision was unlawful
and in violation of the Plaintiff's proprietary rights to the money forfeited to the State.
[57] The authorities are clear that ·a person can as a matter of law be held liable
under the Regulations, by merely being in possession of the funds which are tainted.
It is furthermore manifest, in terms of the Regulations, that money can be attached
even if a person is innocent. The guiding principle which is of seminal importance is
that it is the money that must be tainted, not just the hands in which the money is held.
Moreover, it is irrelevant whether the bank accounts were in existence, the Regulations
permit funds from another source to be attached.
[58] In my view, the Plaintiff's reliance on Regulation 22D in isolation is a narrow
approach and fails to consider what was stated in Trope (supra)57 that a bare
reference to a statute or set of regulations, without specifying the particular section or ·,
regulation on which reliance is placed or the fac;ts which enable the section or . .
regulation to be identified cannot suffice. Even if reliance is placed on Regulation 22B, . .
no reference to the particular section or subsection is made . It is evident that the . . ' . .
provisions are interrelated and as such Regulation 22B deals with the Notice and also
refers to the provisions set out inter alia in Regulations 22A (1 )(a), (b) or (c); Regulation
22c (2) and (3). The legislative provisions are not being challenged, only its
applicability.
[59] To answer the question ~hether P_articul~rs of Claim, as it stands, has been
sufficiently formulated to enable the Excipient to plead to it; I am therefore of the view
that the facts as pleaded by the Plaintiff do not bear out the law as earlier
demonstrated. This void in the Particulars of Claim, in my view, cannot be regarded
as a minor blemish that can be cured. by Further Particulars as the pleader is to plead
with particular particularity.
57 At para 9.
28
[60] I am therefore of the considered view that the Plaintiff has failed to plead the
necessary and essential averments as required in the R egulations to sustain a cause
of action based on the legislative provisions relied upon. The Plaintiff has failed to deal
with the peremptory requirement that the mo ney wa s acquired by the Plaintiff for
reasonable consideration as a result of a transaction in the ordinary course of business
as envisaged in Section 9(2)(b)(cc).
(61] Even if I am wrong, the Plainti~f contended that the impugned decision falls to
be set aside on grounds set out in Section 9(2)(d)(i) and/or (iii) of the Currency and
Exchanges Act, 1933. It is however evident that Section 9(2)(d)(iii) of the Currency
and Exchanges Act stipulates that "the court shall not set aside such decision unless
it is satisfied - . . . that the person who made such decision did not act in
accordance with the relevant provisions of the regulation or ... that such person
did not have grounds to make such decisions.(my emphasis)" The failure by the
Plaintiff to make the peremptory assertions when it is specifically pleaded that the
impugned decision falls to be set aside on grounds set out in Section 9(2)(d)(i) and/or
(iii) of the Currency and Exchanges Act as pleaded, renQers the .Plaintiff's Particulars
of Claim excipiable on thi~ basis alone as there has been non-compliance with the
statutory provision invoked by the Plaintiff.
Alternative Reli~f common law relief
[62] The Plaintiff made the following averments in the Particulars of C laim:
'13. The action to which this Particulars of Claim relates and its Combined
Summons is an "action contemplated by Exchange Control Regulation
22D(b).
14.
15. The decisions referred to . in para 12 above, individually and
collectively, are wrongful and unlawful, a_nd in violation of Plaintiff's
proprietary and/or other rights to the monies forfeited to the State.
16. And/or alternatively, the decision to declare Plaintiff's monies
forfeited to the State and/or the forfeiture itself constitutes unjust
enrichment of the State by°. way of a deposit in the National Revenue
FunCI Bt the expen~e ·of the Plaintiff who is impovorishod by reason
of the loss of the monies standing to his credit in the two bank
29
accounts mentioned in MGS1 at paragraphs 2. 1 and 2.2 in
circumstances where the State's enrichment is unjustified in fact
and/or in law. '58
[63] The Excipient contended that the Plaintiff has already approached the Court
with regards to the remedies distilled in the Exchange Control Regulations and has
pinned its colours to the mast, proverbially speaking, and as such cannot isolate
paragraph 16 of the Particulars of Claim, as the claim is rooted in statutory enrichment
to the benefit of the Reserve Bank. Additionally, the Excipient contended that the
alternative claim of unjust enrichment is merely an afterthought intended to
compensa te for the shortcomings on the main action. It is the Excipient's contention
that the Plaintiff is creating an artificial distinction that there is a common law claim.
[64] The Plaintiff conceded that the express prayer for the alternative relief is absent
but submitted that he is entitled to plead a claim and amend his Particulars of Claim.
Moreover, it was argued that further and/or alternative relief could be granted for the
unjust enrichment claim as an ·averment necessary for that claim was pleaded. . . . .
The Plaintiff however mooted that it is not a ground,' or basis for the Excipient to
contend that a cause of action was not pleaded. The Plaintiff argued in this regard that
the applicable legal principle .is .that a court. is to accept all the facts pleaded as
correct. 59 The Plaintiff contended tbat the Excipient has failed to identify all the
possible readings of the facts that there is no cause of action and as such, submitted
that the Plaintiff is ~ntitled t<:> the unjust enric_hmen.t clai~ upon which the Plaintiff's
alternative claim is rooted, which common law remedy is recognised in our law. It was
argued that it is for the trial court to determine whether the Plaintiff pleaded sufficient
facts for unjust enrichment.
[65] It is trite that a party stands or falls by.what has been pleaded. The matter of
Number Two Piggeries (supra) deals with the failure to plead an averment in the
alternative:
58 Index: Exception, Particulars of Claim, paras 13, 15 - 16, page 8. . . ..
59 Merb (Pty) Ltd v Matthews 2021 ZAGPJHC 693 (16 November 2021), para 8 ' ... (a) In considering an
exception that a pleading does not sustain a cause of action, the court will accept, as true, the
allegations pleaded by the plaintfff to assess whe ther they disclose a cause of action ... '.
30
'It follows that averments in the pleading which are contradictory and which are
not pleaded in the alternative are patently vague and embarrassing; one can
but be left guessing as to the actual meaning (if any) conveyed by the
pleading100
[66] The Notice of Exception did not challenge the alternative claim for unjust
enrichment. It is pellucid that there is no relief sought by the Plaintiff in the alternative,
despite the Plaintiff's amendment to its pleadings subsequent to the filing by the
excipient of the Notice of Exception in oe·cember 2022. The Plaintiff has conceded this
deficiency in the pleadings. It is apparent that this deficiency in Plaintiff's Particulars
of Claim cannot be cured by a simple averment that the forfeiture itself constitutes
unjust enrichment of the State. More particularly, its claim does not seek such relief.
[67) Moreover, the earlier question posed namely, whether the Plaintiff would be
precluded from pleading an alternative common law remedy would culminate in a
departure from the principle of subsidiarity, and would be a matter for consideration . •' . '
for the trial court as it extends beyond the scope of this exception as was earlier stated. . .
Discussion
[68] It is trite is that an exception can be taken where pleadings are vague and
embarrassing or lacks averments which are ~ecessar.y to sustain an action or
defence.61 The failure to seek relief in the ~lternative renders the Particulars of Claim
excipiable on the basis that it.is vague and emqarra_ssing. The question to be answered
is therefore whether this cou~ could deal with the ground of vagueness and
embarrassing if it was not specifically pleaded, beari~g in mind, as earlier mentioned
that an Excipient is obliged to confine hi~ complaint to the stated grounds of its
exception.
[69] The Excipient illuminated. what it . term.eo, as an obvious ambivalence or
contradiction in the Particulars of Claim where it is stated that the "Plaintiff is the
60 At para 8
61 Rule 23 of Un iform Rules of Court, See also Children's Resource C entre Trust and Others v Pioneer
Food Pty Ltd and Others 2013 (2) SA 213 (SCA) at para 36.
31
depositor of the funds held in the two banking accounts ... '162 Plaintiff goes on state that
the "Plaintiff is entitled to the benefits of ow nership of the funds held in the two banking
accounts ... "63 Later the Plaintiff avers:
'The advance payment(s) referred to by the First De fendant as disclosed to
Plaintiff during the investigation by First D efendant and referred to in para 18. 1
above w as not m ade by the Plaintiff but by Jam al Brothers Fashions C C
(registration no. 2006/002518/23), a juristic entity separate and distinct from
Plaintiff, which entity has not rights or claims to any of the m onies declared
forfeited to the State as per the Notice in M G S 1' 64
[70] The Excipient submitted that the Plaintiff incorrectly avers that he cannot as a
matter of fact and/or law be held liable under the ECR for any violation w hich have
been comm itted by Jama l and Brothers CC .65 The Plaintiff contended that the
Excipient's reference to this being the high watermark of the Excipient's claim is
dispelled by the case authorities relied upon by the Excipient as it can at best be
regarded as vague and embarrassing and not that there is no cause of action
disclosed.66 ...
62 Index: Exception Paragraph 9 of the Plcl'intiffs Partic1Jlars of C laim , page 7.
63 Index: Exception Paragraph 1 O of the Plaintiff's Pa rticulars of Claim , page 7. . .
64 Index: Particulars of Claim, paras 18.1 - 18.3. page 9.
65 Index: Exceptio·n, Particulars of C laim, para 18.3, page 9.
66 Number Two Piggeries (Pty) Ltd v City of Tshwane M etropolitan Municipality In re: City of Tshwane
Metropolitan Municipality v Number Two Piggeries (Ply) Ltd (ibid) para 8:
'In Trope v Sou th African Reserve Bank the following wa s -said about an exception relying on the
a/legation that the pleading was vague and embarrassing:
"An exception to a pleading on the ground that it is vague and embarrassing involves a two-fold
consideration. The first is whether the pleading lacks particularity to the extent that it is vague. The
second is whether the vagueness causes em barrassment of such a nature that the excipient is
prejudiced (Quinlan v MacGregor 1960 (4) SA 383 (0) at 393 E - H). As to whether there is prejudice,
the ability of the excipient to produce an exception-proof plea is not the only, nor indeed the most
im portant, test - see the remarks of Conradie Jin Levitan v Newhaven Holiday Enterprises CC 1991
(2) SA 297 (C) at 298G - H . If that were the only test, the object of pleadings to enable parties to come
to trial prepared to meet each other's case and not to be taken by surprise may well be defeated. Thus,
it may be possible to plead to particulars of claim which can be read in any one of a number of w ays by
simply denying the allegations made ; likewise, to a pleading which leaves one guessing as to its actual
meaning. Yet there can be no doubt thc!t such., pleadin~ is excipiable as being vague and embarrassing
- see Pa row Lands (Pty) Ltd v Schneider 1952 .(1 J SA 150 (SWA) at 152F - G and the authorities there
32
[71] The Plaintiff conceded that ther~ is indeed a problem with the pleadings by
virtue of the following submission:
'Despite the above, at best this court may opine that the absence of an express
averment of the kind mentioned in para 13 of the heads filed by First
Defendant's Counsel renders the POC vague and embarrassing. However,
since this is not a ground raised in the exception, it is of no moment here. '67
[72) Although the court indicated that alternative relief would not be considered
which was not pleaded with particular particularity, it is apparent that there appears to
be other deficiencies in the Plaintiff's Particulars of C laim that may render the
pleadings as it stands to be vague and embarrassing. Ordinarily an exception could
be raised on the grounds of it being vague and embarrassing. This court cannot
however consider these grounds as it does not form the basis of the exception in casu
and is enjoined to deal with the grounds of exception as pleaded. To do so would be
prejudicial and a misapplication of the legal principles on exception. The door has not
been shut as there are ?ther legal rem~dies available to the Plaintiff to deal with the
highlighted deficiencies.
Conclusion
[73] As demonstrated earlier, .the .Plaintiff had to bear out a cause of action in terms
of the Regulation_s as relief is .. s_ought in terms of ECR. This court is mindful that the
defences raised is not to be evaluated at the stage of an exception. The overarching
consideration ultimately is whether Parti?ulars of Claim, as it stands, has been
formulated in such a way as to enable the Excipient to plead to it. . . • .
[74] The exception is dis~illed in the referenced legislation which are interrelated and
sufficiently supported by case law. It is .manifest that the facts as pleaded by the
Plaintiff does not align with the app_licable law upo~ which reliance is placed. Regard
is to be had to the purport,. object and e_ntire c?ntext within which the Plaintiff has
cited. It follows tha~ averments in the pleading_w~ich ?;e contradictory,_ and which are not pleaded in
the alternative ar~ patently vague and embc;1rrassing; one can but be left guessing as to the actual
meaning (if any) conveyed by the pleading.".'
67 Plaintiff's Heads of Argument, para 66, page 15.
33
pleaded. Therefore, in considering the pleadings in its entirety I am not persuaded that
the Particulars of Claim contains the averments necessary to sustain his cause of
action under ECR 22D(b) read with ECR 228 and Section 9(2)(d)(i) and (iii) as is it
currently pleaded. In the circumstances, on a plain reading of the law, I am not satisfied
that the Plaintiff has disclosed a cause of action on the law as the Particulars of Claim
as it stands, has not be formulated in such a way as to enable the Excipient to plead
to it insofar as the main relief is concerned.
(75] I pause here to mention that this court is mindful that the purpose of an
exception is to weed out matters witho1,.1t legal merit. The merits or demerits of this
matter cannot be considered at the stage of exception and I make no findings in this
regard, based on the pleadings as it stands.
(76] Furthermore, I am of the viey,1 that a dismissal of the action at this stage would
be premature with concomitant far-reaching consequences. There appears to be a
number of issues that r~quire thorough \(entilation in.? trial in due course. This view is
furthermore predicated on the rel:e.f _sought as it is currently framed, which includes
the setting aside of the decision to declare funds forfei.ted, the publication of the
forfeiture and th~ publication of such declaration as envisaged by ECR 22D (b), wh ich
is interwoven with the second prayer for the recovery of the funds which is under the
administrative control and/or authority of the Second Defendant. Moreover, it is for the
trial court to decide whether the common law alternative relief for unjust enrichment is
sustainable and/or whether the expressly enacted legislative or statutory remedy or
mechanism provided may be circumyented to establish a cause of action in terms of
the common law.
[77] The onus rests on the Excipie~_t to show that the pleading is excipiable on every
possible interpretation that can reasonably be attached to it. I am satisfied that the
Excipient has discharged the onus and that the exception falls to be upheld on the
main relief sought. In order to ameliorate any prejudice to the Respondent, the court
will, in the exercise of its discretion, grant.the respondent l~ave to amend its Particulars
of Claim.
34
Costs
[78] The Excipient contended that costs on an attorney and client scale is
warranted as SARB had to incur significant costs in defending a matter where the
Plaintiff failed to have regard to the ECR , the Currency Exchanges Act and the
jurisprudence in this regard. It was argued that SARB has been significantly
prejudiced.
[79] The Excipient's approach in dealing with this exception has necessitated that
considerations falling outside the notice of exception and the introduction of new
grounds had to be ventilated at the hearing in an attempt to cure deficiencies in the
notice of Exception. As earlier stated, the court was precluded from evaluating the
Heads of Argument in regard to the admissions tha~ are not supported by the
pleadings.
[80] The court in the exercise of its discretion invoked the powers afforded to it by
upholding the exception in a manner that is not prejudicial to the Respondent thereby
ensuring that no _i~jystice is ,Gaus.e_d.
[81] Ordinarily, costs follow the result. It is trite that the matter of costs remains in
the unfettered discretion of the court. .
[82] Therefore in the exercising my judicial discretion, under the circumstances of
this particular cas~. I am of the view that it would be ju~t and equitable that each party
pays their own costs.
Order
[83] In the re_sult, the Court! after _hearing. the submission on behalf of the
respective parties and having considered the documents filed on record makes the
following orders:
(a) The First Defendants exception is L,Jpheld.
(b) The Plaintiff is afforded the opportunity to amend its Particulars of C laim within
20 days of the granting of tl1is order in terms of Rule 28.
35
(c) The parties are directed to each pay their own cos of the exception.
Acting Judge of the High Court of
Sou th Africa, Wes tern Cape Division,
Cape Town
36
APPEARANCES :
Counsel for the Plaintiff:
Instructed by:
Counsel for the First Defendant:
Instructed by:
Heard on 01 November 2023
Prof. Fareed Moosa
Moosa & Pearson Inc.
Advocate T Govender
Macrobert Incorporated
Delivered 26 January 2024 - This judgment was handed down electronically
by circulation to the parties' representatives by email.
37