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[2011] ZASCA 164
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Clear Enterprises (Pty) Ltd v Commissioner for South African Revenue Services and Others (757/10) [2011] ZASCA 164; 83 SATC 136 (29 September 2011)
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THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case no: 757/10
CLEAR
ENTERPRISES (PTY) LTD
...........................................................................
Appellant
and
THE
COMMISSIONER FOR THE SOUTH AFRICAN
REVENUE
SERVICES
...................................................................................
First
Respondent
CROSS-BORDER
ROAD TRANSPORT AGENCY
..................................
Second
Respondent
CART
BLANCHE MARKETING
....................................................................
Third
Respondent
THE
INTERNATIONAL TRADE
ADMINISTRATION
COMMISSION
..............................................................
Fourth
Respondent
Neutral citation:
Clear Enterprises (Pty) Ltd v SARS
(757/10)
[2011] ZASCA 164
(29 September 2011)
BENCH:
PONNAN, CACHALIA, LEACH, WALLIS JJA and PETSE AJA
HEARD: 2 SEPTEMBER 2011
DELIVERED: 29 SEPTEMBER 2011
CORRECTED:
SUMMARY:
Appeal – s 21A(1) of the Supreme Court Act – power of
court to dismiss appeal where judgment or order sought
would have no
practical effect or result.
______________________________________________________________________
ORDER
______________________________________________________________________
On
appeal from
:
North Gauteng High Court
(Pretoria)
(Murphy J
sitting as court of first instance).
The appeal
is struck off the roll and each party is ordered to pay its own
costs.
______________________________________________________________________
JUDGMENT
______________________________________________________________________
PONNAN JA (CACHALIA, LEACH, WALLIS JJA and PETSE AJA concurring):
[1] On 2 September 2011 this appeal was struck off the roll in terms
of s 21A of the Supreme Court Act 59 of 1959 and each party
was
ordered to pay its own costs. It was intimated when so ordering that
reasons would follow. These are those reasons.
[2] Section 21(A)(1) of the Supreme Court Act 59 of 1959 provides:
'When at the hearing of any civil appeal to the
Appellate Division or any Provincial or Local Division of the Supreme
Court the
issues are of such a nature that the judgment or order
sought will have no practical effect or result, the appeal may be
dismissed
on this ground alone.'
The primary question therefore, one to which I now turn, was whether
the judgment sought in this appeal would have any practical
effect or
result. It arises against the backdrop of the following facts.
[3] On 22 February 2007 and at Port Elizabeth, Mr Gideon van
Loggerenberg, a senior customs and excise officer in the employ of
the first respondent, the Commissioner, South African Revenue Service
(the Commissioner) detained two trucks — a Mercedes
Benz and an
ERF. On 23 April of the same year a similar fate befell a third
truck, a Leyland DAF Rigid. All three trucks belonged
to the
appellant, Clear Enterprises (Pty) Ltd (Clear Enterprises), a
Botswana based company. In detaining each of those trucks,
Van
Loggerenberg purported to act in terms of s 88(1)(a) read with s 87
of the Customs and Excise Act 91 of 1964 (the Act). Section
87(1)
expressly provides that goods imported or otherwise dealt with
contrary to the provisions of the Act are liable to forfeiture
'wheresoever and in possession of whomsoever found'. In turn s
88(1)(a) provides that certain persons may detain any goods at any
place for the purpose of establishing whether they are liable to
forfeiture under the Act. And Paragraph (
d
) of s 88(1)
authorises the Commissioner, in his discretion, to seize any goods
liable to forfeiture under the Act. (See
Tieber v Commissioner for
Customs and Excise
[1992] ZASCA 183
;
1992 (4) SA 844
(A) at 847C-D.)
[4]
Clear Enterprises launched two separate applications in the North
Gauteng High Court against the Commissioner, as the first respondent,
the Cross-Border Road Transport Agency (the CBRT), a juristic person
established in terms of s 4(1) of the Cross-Border Road Transport
4
of 1998 (CBRT Act), as the second respondent and Cart Blanche
Marketing CC, a South African closed corporation as the third.
No
relief was sought against either the second or third respondents and
neither participated in the proceedings either in this
court or the
one below. The International Trade Administration Commission of South
Africa (ITAC), a juristic person established
in terms of s 7 of the
International Trade Administration Act 71 of 2002 (ITA Act), sought -
but was refused - leave by the high
court to intervene in the matter.
That notwithstanding it continues to be cited as the fourth
respondent. Needless to say it took
no part in the appeal.
[5] The primary relief sought by Clear Enterprises in the first
application was:
'1. The detention in terms of section 88(1)(a) of the
Customs and Excise Act No. 91 of 1964 of a Leyland DAF 55 Rigid Truck
with
chassis number L156272, engine number 21288296, and registration
number and letters B955ALU ("the vehicle") on 23 April
2007
at Port Elizabeth is declared to have been unlawful.
2.
Alternatively to prayer 1 above
, the
continued detention in terms of section 88(1)(a) of the Customs and
Excise Act No. 91 of 1964 of the vehicle is declared to
be unlawful.
3. The First Respondent is ordered, at its own cost, to
immediately restore the vehicle into the Applicant's possession,
alternatively
to immediately permit the Applicant to
remove the vehicle from the Westview State Warehouse, Port Elizabeth
or wherever else the
vehicle is presently detained by the First
Respondent.'
And, that sought by it in the second was:
'1. First Respondent's seizure in terms of Section
88(1)(c) read with Section 87 of the Customs and Excise Act, 91 of
1964 (hereinafter
referred to as "the Customs and Excise Act")
on 23 May 2007 and at Port Elizabeth of the following vehicles
(hereinafter
referred to as "the vehicles") is reviewed
and/or declared unlawful and set aside:-
1.1. Mercedes Benz truck with chassis number
385019251403982, engine number 35 395120 799399 and registration
number and letter
B 786 AKB; and
1.2. ERF truck with chassis number 68038, engine number
6BTA21085000 and registration number and letters B 540 AKU.
2. First Respondent is ordered, at its own costs, to
immediately return the vehicles into Applicant's possession,
alternatively
to immediately permit the Applicant to remove
the vehicles from the West View State Warehouse, Port Elizabeth or
wherever else
the vehicles are presently held by First Respondent;
3. In the event of First Respondent failing to either
return and deliver the vehicles to Applicant or to enable or allow
the Applicant
to remove the vehicles as provided for in paragraph 2
above, the Sheriff or his lawfully deputy is duly authorised,
empowered and
directed to remove the vehicles from possession of
First Respondent or wherever the vehicles may be found and to deliver
the vehicles
to the Applicant.'
[6] In each application Clear Enterprises, moreover, sought
additional declaratory relief. In its amended form the orders sought
were:
'2. That the movement of a vehicle from a country within
the common customs area into the Republic of South Africa (RSA) after
such
vehicle had been lawfully imported into such other country
within the common customs area and such movement either:-
a) being pursuant to a permit issued by the competent
authority of such other country to a carrier as defined under Article
1(a)
of the Memorandum of Understanding on Road Transportation in the
Common Customs Area (promulgated by Proclamation 100 in Government
Gazette No 13576 on 18 October 1991 and hereinafter referred to as
the "
MOU
"); or
b) pursuant to an exception as provided for under
Article VIII of the MOU; and
c) inclusive of when transport is undertaken with such
vehicle on a public road in the RSA involving the on and/or off
loading of
freight between two points within the RSA either by a
foreign carrier in terms of an appropriate permit issued in terms of
Section
31 of the Cross Border Road Transport Act, 4 of 1998 or
without such permit by someone who is not a foreign carrier:-
2.1. does not attract import or export duties; and
2.2. is not regarded as goods imported into the Republic
of South Africa as envisaged in the Customs and Excise Act, 91 of
1964,
unless such vehicle is to be disposed of.
[7] Murphy J, who heard both applications, dismissed them but granted
leave to Clear Enterprises to appeal to this court.
[8] For a fuller understanding of the matter and a better
appreciation of the competing contentions of the parties it is
necessary
to record that the Republics of South Africa, Namibia and
Botswana as also the Kingdoms of Lesotho and Swaziland, being members
of the Southern African Customs Union (SACU), are parties to certain
SACU agreements. Two of those are relevant for present purposes.
The
first, which excluded Namibia, was entered into on 11 December 1969
(the 1969 SACU Agreement). It was subsequently
superseded
by what has been described on the record as a more sophisticated,
re-negotiated agreement entered into on 21 October 2002 (the
2002
SACU Agreement). The 2002 SACU Agreement came into effect on 15 July
2004. Subsequent thereto certain additional understandings,
which
were to be read with and to form part of the SACU agreements, were
reached amongst the government parties to the SACU agreements.
On 18
October 1991 a Memorandum of Understanding (MOU) on road
transportation in the common customs area was concluded between
the
states parties to the 1969 SACU agreement and was published as a
Schedule to the Transport Deregulation Act 80 of 1988.
[9] According to Clear Enterprises, the three trucks were imported
into the Republic of Botswana. Each landed at Durban and was
then
transported to Botswana in bond. Being second-hand trucks, like
others in its fleet, there they were repaired and refurbished
before
being licensed and registered in its name. Clear Enterprises asserts
that its trucks enter the Republic of South Africa
from time to time,
which, so the assertion goes, is permissible in terms of the SACU
agreements and the MOU. Moreover, according
to Clear Enterprises,
despite not necessarily always being required, permits in accordance
with the provisions of s 31 of the CBRT
Act are also obtained in
respect of its trucks that enter South Africa.
[10] According to Mr Van Loggerenberg, who deposed to the answering
affidavit on behalf of the Commissioner in each matter, a certain
Mr
Eric Muller and Ms Michelle Airey are the controlling minds of
various juristic entities including Clear Enterprises. He states
that
Clear Enterprises' explanation and justification for the presence of
these three as well as various other trucks in the Republic
of South
Africa is fictional. Rather, so he asserts, the explanation advanced
by Clear Enterprises is a subterfuge designed to
conceal a scam
devised and implemented by Mr Muller and Ms Airey to import used
trucks into South Africa in breach of the provisions
of both the
Customs and Excise Act and
International Trade Administration Act. Mr
Van Loggerenberg complains that the trucks were imported into the
Republic of South Africa without the provisions of those two
Acts
being complied with ‘and for the purpose of avoiding the
payment of duty and defrauding the fiscus’. He states
that in
terms of paragraph 1(b) of Notice Number R3, published in the
Government Gazette Number 25873 of 2 January 2004, the Minister
of
Trade and Industry has declared that no second-hand or used goods may
be imported into the Republic of South Africa except by
virtue of an
import permit issued in terms of s 6 of the ITA Act. ITAC, the
authority responsible for the issuing of permits required
in terms of
s 6 of the ITA Act, has decided that no permits for the import of
second-hand or used vehicles should be issued. Accordingly,
so Mr Van
Loggerenberg asserts, Mr Muller and Ms Airey's solution to the
conundrum was to establish juristic entities such as Clear
Enterprises in other SACU member states. Each of those juristic
entities was then used as a front to import used trucks into the
common customs union and then invoking the SACU Agreement and the MOU
those trucks were driven into South Africa where they were
used
locally on a permanent basis.
[11] On 16 October 2007 all three of the trucks were seized by ITAC
in terms of s 4(1)(
g
) of the ITA Act from an employee of the
Commissioner, the Controller of Customs in Port Elizabeth. The
seizure by ITAC predated
the filing of replying affidavits by Clear
Enterprises in the two applications. The matter was argued before
Murphy J during October
2008 and judgment was handed down on 3 August
2009. And yet in all of that time neither the parties nor the court
below appeared
to appreciate that the controversy which occupied them
may not have been an existing or live one. For, plainly, after the
seizure
of the vehicles by ITAC the primary relief initially sought
by Clear Enterprises, namely, the return of the vehicles, had become
academic. Thus after heads of argument on the merits of the appeal
had been filed, this court addressed a directive to the parties
calling for further heads and informing the parties that at the
outset of the hearing of the appeal they would be required to address
argument on the preliminary question of whether the appeal and any
order made thereon would within the meaning of s 21A have any
practical effect or result.
[12] Courts should and ought not to decide issues of academic
interest only. That much is trite. In
Radio
Pretoria v
Chairman, Independent Communications Authority of South Africa
2005 (1) SA 47
(SCA) this court expressed its concern about the
proliferation of appeals that had no prospect of being heard on the
merits as
the order sought would have no practical effect. It
referred to
Rand Water Board v Rotek Industries (Pty) Ltd
2003
(4) SA 58
(SCA) at para 26 where the following was said:
'The present case is a good example of this Court's
experience in the recent past, including unreported cases, that there
is a growing
misperception that there has been a relaxation or
dilution of the fundamental principle . . . that Courts will not make
determinations
that will have no practical effect.'
[13] In the further heads of argument and affidavits filed by the
parties to address the preliminary point raised we were advised
that
Clear Enterprises has launched an application against ITAC in the
North Gauteng High Court during December 2009 in which both
the
Commissioner and ITAC are cited as respondents. It seeks an order
that the seizure by ITAC of all three vehicles be reviewed
and set
aside and also for certain declaratory relief pertaining to the
interpretation of inter alia the MOU as read with the relevant
SACU
agreements. That application has been opposed by both the
Commissioner and ITAC. The parties to the present appeal have agreed
that that application should be stayed pending the outcome of this
appeal. Why that course was adopted is lost on me. We are not
concerned in this appeal with the same issue as will occupy the
attention of the high court in that application.
[14] The parties urged upon us that, notwithstanding the seizure of
the trucks by ITAC, we should nonetheless entertain the appeal.
By
that they meant that although the primary relief could no longer be
granted we should nonetheless proceed to consider the merits
of the
declaratory relief sought. Broadly stated two reasons were advanced:
first, that there are a number of other pending matters
and in all of
them ‘the questions of law to be determined therein, are to a
greater or lesser extent similar (in certain
instances even
identical) to those to be determined in the present appeal'; and,
second, should Clear Enterprises in due course
succeed in the pending
review application against ITAC in the high court ‘same would
be an empty judgment, should [this]
Court not hand down a judgment in
this appeal, as the seizure by [the Commissioner] would then simply
remain’. The second
issue should perhaps be disposed of first
in order to clear the way for a consideration of the main issue in
this appeal. I shall
do so briefly.
[15] As to the second issue: The parties misconceive the position.
The employees of the Commissioner who had possession of the
three
vehicles voluntarily parted with such possession on being served with
a seizure notice by ITAC. The Commissioner’s
jus retentionis
thus terminated with that loss of possession. If in due course the
seizure by ITAC is set aside by the high court in the pending
application, possession of the vehicles shall not, without more,
revert to the Commissioner. That disposes of the second issue.
[16] Turning to the first: Not all of the cases pending before the
high court involve the same parties. To the extent that they
concern
different parties any declaratory order that issues can hardly be
binding on those other parties. Moreover, each of the
pending
applications involves different vehicles. The fallacy in the approach
of the parties is that they assume, erroneously so,
that what
confronts us is a discrete point of statutory construction. It is
not. It is first and foremost a fact-based enquiry.
Any interpretive
exercise to be undertaken will be inextricably linked to the facts.
And, it is trite that every case has to be
decided on its own facts.
That is particularly the case where, as here, the one party contends
that the facts advanced by the other
are a ‘sham’,
‘fictional’ and a ‘stratagem’ to circumvent
the applicable legislation. It follows
that efforts to compare or
equate the facts of one case to those of another are unlikely to be
of assistance. For, as we well know,
parties frequently endeavour to
distinguish their case on the facts from those reported decisions
adverse to their cause. Moreover,
absent an undisputed factual
substratum, it would be extremely difficult to define the limits of
the declaratory relief that should
issue.
[17] Simply put, whatever issues do arise in the pending matters none
of them are yet ‘ripe’ for adjudication by this
court. To
borrow from Kriegler J in
Ferreira v Levin NO & others
;
Vryenhoek v Powell NO & others
1996 (1) SA 984
(CC) para
199:
'The essential flaw in the applicants' cases is one of
timing or, as the Americans and, occasionally the Canadians call it,
"ripeness".
That term has a particular connotation in the
constitutional jurisprudence of those countries which need not be
analysed now. Suffice
it to say that the doctrine of ripeness serves
the useful purpose of highlighting that the business of a court is
generally retrospective;
it deals with situations or problems that
have already ripened or crystallised, and not with prospective or
hypothetical ones.
Although, as Professor
Sharpe
points out and our Constitution acknowledges, the
criteria for hearing a constitutional case are more generous than for
ordinary
suits, even cases for relief on constitutional grounds are
not decided in the air. And the present cases seem to me, as I have
tried to show in the parody above, to be pre-eminent examples of
speculative cases. The time of this Court is too valuable to be
frittered away on hypothetical fears of corporate skeletons being
discovered.’
[18] Although expressed somewhat differently and in the different
context of constitutional adjudication where ‘ripeness’
has taken on a particular meaning, both the principles and policy
considerations articulated by Kriegler J resonate with the
jurisprudence
of this court. Thus in
Coin Security Group (Pty) Ltd
v SA National Union for Security Officers & others
[2000] ZASCA 137
;
2001 (2)
SA 872
(SCA) para 9, Plewman JA quoted with approval from the speech
of Lord Bridge of Harwich in the case of
Ainsbury v Millington
[1987] 1 All ER 929
(HL), which concluded at 930
g
:
‘
It has always been a
fundamental feature of our judicial system that the Courts decide
disputes between the parties before them;
they do not pronounce on
abstract questions of law when there is no dispute to be resolved'.
In a similar vein, in
Western Cape Education Department v George
1998 (3) SA 77
(SCA) at 84E, Howie JA stated:
'Finally, it is desirable that any judgment of this
Court be the product of thorough consideration of,
inter
alia
, forensically tested
argument from both sides on questions that are necessary for the
decision of the case.”
And in
Radio Pretoria
(para 44), Navsa JA said:
'Courts of appeal often have to deal with congested
court rolls. They do not give advice gratuitously. They decide real
disputes
and do not speculate or theorise (see the
Coin
Security
case (
supra
)
at paragraph [7] (875A-D)). Furthermore, statutory enactments are to
be applied to or interpreted against particular facts and
disputes
and not in isolation.'
[19] In effect what the parties are seeking is legal advice from this
court. But as Innes CJ observed in
Geldenhuys & Neethling v
Beuthin
1918 AD 426
at 441:
'After all, Courts of Law exist for the settlement of
concrete controversies and actual infringements of rights, not to
pronounce
upon abstract questions, or to advise upon differing
contentions, however important.'
In
National Coalition for Gay and Lesbian Equality & others v
Minister of Home Affairs & others
2000 (2) SA 1
(CC) para 21
footnote 18, the Constitutional Court echoed what the learned Chief
Justice had stated over eight decades earlier
when it said:
'A case is moot and therefore not justifiable if it no
longer presents an existing or live controversy which should exist if
the
Court is to avoid giving advisory opinions on abstract
propositions of law.'
The cumulative consequence of all the factors that I have alluded to
is that no practical effect or result can be achieved in this
case.
For the aforegoing reasons the appeal was struck off the roll.
[20] That leaves costs. On 7 July 2011 the Registrar of this Court
directed the attention of both parties to the provisions of
s 21A and
enquired whether the appeal was being persisted in. Undeterred both
parties filed additional heads of argument and affidavits
intimating
that they persisted with the appeal. That was the stance adopted
before us in argument as well. Neither was an unwilling
participant
in the appeal. Moreover, the point which was held to be decisive of
the matter was raised by the court and not one
of the parties. In
those circumstances it was deemed appropriate that each party be
ordered to pay its own costs.
_________________
V PONNAN
JUDGE OF APPEAL
APPEARANCES:
For
Appellant: I J Zidel SC
J
C Uys
Instructed
by:
Eugene
Marais Attorneys
Bryanston
Symington
& De Kok
Bloemfontein
For
1
st
Respondent: J A Meyer SC
L
G Kilmartin
Instructed
by:
The
State Attorney
Pretoria
The
State Attorney
Bloemfontein