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[2014] ZAGPPHC 116
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DKR Auto CC v Commissioner for the South African Revenue Services (42604/2012) [2014] ZAGPPHC 116; 76 SATC 279 (13 March 2014)
IN THE HIGH COURT
OF SOUTH AFRICA, PRETORIA
(REPUBLIC OF
SOUTH AFRICA)
CASE
NO: 42604/2012
DATE:
13 MARCH 2014
In the matter
between:
DKR AUTO
CC
.........................................................................................
Applicant
And
THE COMMISSIONER
FOR THE SOUTH AFRICAN
REVENUE
SERVICES
......................................................................
Respondent
JUDGMENT
MURPHYJ
1. The applicant,
DKR Auto CC, (“DKR”) made application for an order
setting aside the seizure by the respondent, the
Commissioner for the
South African Revenue Services, (“the Commissioner”), of
a Lamborghini Murcielago with identification
number ZHWBE47508LA02819
(“the vehicle”). The seizure was effected on 18 November
2011 in terms of section 88(1 )(c)
of the Customs and Excise Act 91
of 1964 (“the Act”).
DKR brought the
application to have the seizure set aside and for the vehicle to be
returned to it in terms of section 89 of the
Act. Alternatively, it
sought to review and set aside the seizure in terms of the
Promotion
of Administrative Justice Act 3 of 2000
.
2. On 27 February
2014 I upheld a point in limine raised by the Commissioner, dismissed
the application and ordered DKR to pay the
costs, including the costs
of two counsel and those reserved by Fourie AJ on 27 August 2013.
These are my reasons for those orders.
3. The Commissioner
contends that DKR is not the owner of the seized vehicle and
consequently lacks locus standi to bring the application.
4. The vehicle was
detained on 23 March 2011 by officials of the Commissioner in terms
of
section 88(1
)(a) of the Act.
5. Section 88(1) of
the Act reads:
“88. Seizure.
- (1) (a) An officer, magistrate or member of the police force may
detain any ship, vehicle, plant, material
or goods at any place for
the purpose of establishing whether that ship, vehicle, plant,
material or goods are liable to forfeiture
under this Act.”
(b) Such ship,
vehicle, plant, material or goods may be so detained where they are
found or shall be removed to and stored at a
place of
security determined
by such officer, magistrate or member of the police force, at the
cost, risk and expense of the owner, importer,
ex-importer,
manufacturer or the person in whose possession or on whose premises
they are found, as the case may be.
(bA) No person shall
remove any ship, vehicle, plant, material or goods from any place
where it was so detained or from a place
of security determined by an
officer, magistrate or member of the police force.
(c) If such ship,
vehicle, plant, material or goods are liable to forfeiture under this
Act the Commissioner may seize that ship,
vehicle, plant, material or
goods.
(d) The Commissioner
may seize any other ship, vehicle, plant, material or goods liable to
forfeiture under this Act.”
6. At the time the
vehicle was detained it was registered on the E-Natis system in the
name of Mr Ryan Drake (“Drake”),
but was kept at 54A
Kloof Road, Bedfordview, the home of Mr. Radovan Krejcir, the husband
of Ms Katerina Krejicrova, the sole member
of DKR.
7. Subsequent to the
detention of the vehicle there was an exchange of information and
correspondence between the attorneys of DKR
and the Commissioner
regarding the vehicle. The Commissioner attached various books and
documents as part of his investigation.
Eventually, on 18
November 2011, the
Commissioner addressed a letter to DKR’s attorneys informing
them that he had decided to seize the vehicle
in terms of section
88(1 )(c) and advising them inter alia of the rights of an owner in
terms of section 93 of the Act.
8. Section 89(1) of
the Act recognizes the right of the owner to institute proceedings to
claim seized goods. It reads:
“(1) Whenever
any proceedings are instituted to claim any ship, vehicle, container
or other transport equipment, plant, material
or goods (in this
section, section 43 and section 90 referred to as “goods”),
which have been seized under this Act,
such claim must be instituted
by the person from whom they were seized or the owner or the owner’s
authorized agent (in this
section referred to as “the
litigant”).”
9. Section 93(1)
provides that the Commissioner may, on good cause shown by the owner
of a seized vehicle (or other seized goods),
direct that it be
delivered to the owner subject to the payment of any duty, the
charges incurred in the connection with the seizure
and such
conditions as the Commissioner may determine.
10. It is common
cause between the parties that only the owner of the vehicle or the
person from whom the vehicle was seized has
locus standi to institute
proceedings to claim the vehicle in terms of section 89 of the Act.
11. DKR sets out its
version of the history of the ownership of the vehicle in the
founding affidavit. The Commissioner has cast
doubt about the
accuracy, completeness and authenticity of the explanation and the
various transactions in relation to the vehicle.
12. According to
DKR, the first registered owner of the vehicle in South Africa was
Scara Technologies. Annexure FA2 to the founding
affidavit is an
official certificate of registration reflecting that the vehicle was
“built up” and registered in the
name of Scara
Technologies on 12 October 2010. According to Krejicrova, the
deponent to the founding affidavit, Scara Technologies
pursuant to a
written loan agreement borrowed R20 million from Groep Twee
Beleggings (Pty) Ltd, (“Groep Twee”) of which
Krejicrova
was a director and the sole shareholder.
13. The loan of R20
million, paid in cash, was concluded on 29 September 2010, one month
before the vehicle was registered in the
name of Scara Technologies.
In terms of clause 4.2 of the loan agreement, Scara Technologies
“ceded” the vehicle, as
yet not registered in its name,
to Groep Twee as security for the repayment of the loan. Krejicrova
further averred that when Scara
Technologies could not repay the
loan, Groep Twee became the owner of the vehicle. She did not state
in the founding Affidavit
when Scara Technologies defaulted. But it
is recorded in Annexure JG03 to the answering affidavit, an E-Natis
query, that the
vehicle was
registered in the name of DKR on 29 October 2010, a mere 17 days
after it was registered in the name of Scara Technologies
and one
month after the conclusion of the loan for R20 million, despite
clause 3 of the loan providing for the first instalment
to become due
and payable on 15 January 2011.
14. There is no
record or documentary evidence indicating that the vehicle was
transferred from Scara Technologies to Groep Twee.
As stated, it was
registered in the name of DKR just over two weeks after its first
registration in the name of Scara Technologies.
Krejicrova claims
that Groep Twee sold the vehicle to DKR for an amount of R3,5
million. She does not state when this sale was
concluded, but
presumably it was done (if at all) some time in October 2010.
Krejicrova is the sole member of DKR and the only
shareholder of
Groep Twee. The purchase price for the vehicle, she averred, was paid
by creating a loan account in favour of Groep
Twee against DKR.
15. On 21 February
2011 DKR sold the vehicle to Drake for R2,8 million. The written
agreement, annexed as annexure FA5 to the founding
affidavit,
provides that the purchase price for the vehicle was payable on or
before 10 October 2011. Drake was expressly granted
the right to
register the vehicle in his name, but the vehicle was to be “stored”
at the home address of Krejcir and
Krejcirova “in the interim”.
Drake agreed to sign a blank change of ownership back in favour of
DKR to enable DKR to
re¬register the vehicle should the purchase
price not be paid by 10 October 2011. The vehicle was registered in
the name of
Drake on 11 March 2011. One may assume therefore that
ownership was transferred to Drake according to Krejcirova by reason
of a
complete sale on credit, a real agreement and delivery in the
form of traditio longa manu or constitutum possessorium.
16. The Commissioner
detained the vehicle, removed it from the Krejcir home and took it
into custody on 23 March 2011.
17. The detention of
the vehicle made it impossible to sell the vehicle, and thus Drake
was supposedly unable to raise the purchase
price by selling the
vehicle on, as may have been the original intention. Despite Drake
having until 10 October 2011 to pay the
price, DKR, or someone acting
on its behalf, re-registered the vehicle in the name of DKR on 17
August
2011. DKR contends
that since it again became the owner of the vehicle from that date it
has locus standi to institute proceedings
to claim the vehicle.
18. The
Commissioner’s investigation revealed that the vehicle was
imported into the country during April 2009 from the United
Kingdom.
The exporter was Clive Sutton Ltd, a car dealer. The importer was
recorded in the relevant documentation as Mrs Leanne
Kistan of
Northriding, Johannesburg. The value of the vehicle was reflected as
being £16 000 (or the then equivalent of R212
899), when its
value in the sales documentation was stated to be £160 000. The
import documentation described the vehicle
as a complete vehicle
capable of carrying passengers and was not a “built up”
vehicle as recorded in the first E-Natis
registration. Ms Kistan has
deposed to an affidavit stating that neither she nor anyone she knows
purchased the vehicle and imported
it into South Africa.
19. Further
investigation established that the funds paid for the vehicle (£160
000 plus incidental costs of £8100)
to Clive Sutton Ltd
originated from a company named DKR Invest Praha, which name
resembles that of the applicant, DKR Auto CC.
The funds seem to have
been transferred to Clive Sutton Ltd from a bank in Prague, Czech
Republic, the home country of Krejcir.
20. The Commissioner
maintains that the vehicle most probably was acquired by Krejcir for
his use, but that he has sought to disguise
his interest in it by
resorting to the transactions set out in the founding affidavit;
which the Commissioner suspects are not
genuine. He sets out in some
detail the relationship between Krejcir and one Casciani who, the
record shows convincingly, was the
person who initially dealt with
Clive Sutton Ltd, and did so on behalf of Krejcir.
21. It is
unnecessary for this court to make a definitive finding regarding the
true ownership of the vehicle. The narrower question
for
determination was whether DKR had established its locus standi for
the purpose of these proceedings.
22. It is common
cause that the vehicle was not detained and removed from DKR. On its
version, Drake was the owner of the vehicle
when the Commissioner
detained it. Assuming that DKR did in fact acquire ownership in
October 2010, it sold the vehicle on credit
to Drake on 21 February
2011, intended to transfer it to him, allowed him to register it in
his name and effected delivery most
probably by constitutum
possessorium. When Drake opted to “sell” the vehicle back
to DKR in August 2011, the vehicle
was in the custody and possession
of the Commissioner, and by virtue of section 88(1 )(bA) of the Act
there existed a prohibition
on the removal of the vehicle from the
place where it was detained. Consequently, when Drake purported to
sell the vehicle back
to DKR (the purchase price presumably being in
the form of the release from his obligation to DKR) he could not have
transferred
ownership back to DKR because he was not in a position to
make delivery.
23. Ownership in a
movable corporeal thing is conveyed in law by delivery, i.e. by
transfer of possession and control. The transferee
must be placed in
a position to exercise factual control over the property. If Drake
was indeed the owner in March 2011 when the
vehicle was detained, as
DKR contends, he then lost the capacity to transfer ownership to DKR
when the Commissioner took factual
control of the vehicle.
24. Counsel for DKR
submitted that transfer of ownership to DKR could have occurred by
way of constructive delivery, possibly accomplished
by the
registration of the vehicle in the name of DKR in August 2011. Our
law recognizes a limited number of instances of constructive
delivery, none of which apply in this case. Both traditio longa manu
and constitutum possessorium require the transferor (Drake)
to remain
in possession after the sale, which was clearly not the case here.
Traditio brevi manu would have required DKR to have
been in
possession when the re-sale took place in August 2011, which it was
not. The only possibility then would be attornment,
being a situation
where delivery is effected by an agreement between the holder of the
property (in this case the Commissioner)
and the two parties to the
sale. Attornment can only be effected by a tripartite agreement
between the parties that the holder
will hold on behalf of the
transferee. There must be a mental concurrence of all three parties,
usually achieved by the instruction
of the transferor to the holder
that ownership has been transferred to the transferee. It is common
cause that Drake did not inform
the Commissioner that he had re-sold
the vehicle to DKR and hence delivery could not have been effected by
attornment. In the premises,
ownership was not transferred from Drake
to DKR on 17 August 2011.
25. In the final
analysis, the case put up by DKR in support of its claim of ownership
does not establish that it is in fact the
owner. There is no other
evidence confirming its ownership. It has accordingly not discharged
the onus on it to prove its locus
standi. It has shown no sufficient,
personal and direct interest permitting it to claim the vehicle or to
review the Commissioner’s
decision to seize it.
26. For those
reasons I upheld the point in limine and granted the order I did.
JR MURPHY
JUDGE OF THE HIGH
COURT
Date Heard: 27
February 2014
For the
Applicant: Adv v.d. Heever
Instructed
By: Faber Goertz Ellis Austin Inc.
For the
Respondent: Adv MP vd Merwe
Instructed
By: State Attorney, Pretoria
IN THE HIGH COURT
OF SOUTH AFRICA
(TRANSVAAL
PROVINCIAL DIVISION)
PRETORIA 27
February 2014 CASE NO: 42604/2012
BEFORE THE
HONOURABLE JUSTICE MURPHY
In the matter
between:
DKR AUTO
CC
.........................................................................................
Applicant
And
THE COMMISSIONER
FOR THE SOUTH AFRICAN
REVENUE
SERVICES
.........................................................................
Respondent
HAVING HEARD
counsel(s) for the party(ies) and having read the documents filed of
record and by agreement between Applicant and
Respondents 1 and 2
IT IS ORDERED
1. The point in
limine is upheld.
2. The
application is dismissed with costs, such costs to include the costs
of two counsel including the costs reserved by the court
on 27 August
2013.
BY THE COURT
F*E0ISTRAB
I Att: Faber
Goertz Ellis Austin Inc.
HIGH COURT
TYPIST: BvZ