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IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
[REPORTABLE]
Case Number: 1843/2022
In the matter between:
GAMAL ABDEL WAHAB E MOSELHY SALEH Plaintiff
And
SOUTH AFRICAN RESERVE BANK First Defendant
MINISTER OF FINANCE Second Defendant
JUDGMENT
Andrews AJ
Introduction
[1] This is an opposed interlocutory application instituted by the First Defendant
who raises an exception against the Plaintiff’s Particulars of Claim on the basis that it
lacks the necessary averments to sustain a cause of action.
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Background Facts
[2] The Plaintiff received a Forfeiture Notice from the First Defendant (“ SARB”)
dated 03 August 2022 , i n terms of Regulation 22B of the Exchange Control
Regulations of 1961 (“ECR”).1 The Plaintiff was advised in terms of the copy
“Staatskoerant” attached thereto, dated 2 August 2022 , that amounts of
R1 011 862.59 and R77 431.92 held at First Rand Bank Limited and A BSA 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 “MGS 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 22B (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 Control Regulation 22D, any person who feels aggrieved by a
decision under Exchange Control Regulation 22B 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
22B made under Section 9 of the Currency and Exchanges Act, 1933…in respect of:
Mr Gamal Abdel Wahab El. Moselhy 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, 22B, 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. By virtue of the functions, powers and/or duties vested in me, in my capacity as the Deputy
Governor 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 money 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 Mr Gamal Abdel Wahab
El. Moselhy Saleh, in account number…, held with FirstRand Bank Limited, together with any
interest thereon and/or other accrual thereto.
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[3] On or about 28 October 2022 t he Plaintiff instituted action against the
Defendants. According to the Particulars of Claim, t he 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 th e monies
forfeited to the State. Additionally, it is averred that in accordance with 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 am plification, the Plaintiff averred that the decision to freeze
Plaintiff’s bank accounts, and subsequent ly declare funds forfeited to the State is
premised on the wrong allegation and/or erroneous belief , and/or suspicion that
Plaintiff trading as G A W 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 which goods to the value of approximately R74 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 entity separate and distinct from Plaintiff, which entity has no rights or
claims to any of the monies declared forfeited to the State. The Plaintiff furthermore
alleged that it cannot, as a matter of fact and/or in law be held liable under the ECR
for any violation thereof which may have been committed by Jamal Brothers CC.
2.2 The amount of R77 431.92 being capital standing to the credit of Mr Gamal Abdel Wahab El.
Moselhy Saleh, in account number…, held with Absa Bank Limited, together with any interest
thereon and/or other accrual thereto.
3. The date upon which the money specified in 2 above is hereby forfeited to the State is the date
upon which this Notice of Forfeiture is published in this Gazette.
4. The money specified in 2 above shall be disposed of by deposit to the National Revenue Fund.
5. This Notice also constitute a written order, as contemplated in Exchange Control Regulation 22B,
in term of which the money specified in 2 above is hereby forfeited to the State… ’ 2
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[5] The Plaintiff is seeking the following relief against the First and/or Second
Defendant as amended include the following:
(a) An order under Exchange Control Regulation 22D(b) setting aside the
decision to declare Plaintiff’s monies forfeited to the State;
(b) An order dir ecting First Defendant to repay to Plaintiff the aggregate sum of
R1 089 294.51 plus interest at the prescribed legal rate a tempora morae 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 deems fit.
Grounds of Exception
[6] The First Defendant take s exception to the Plaintiff’s Particulars of C laim on
the grounds that it lacks the necessary averments to sustain a cause of action. The
grounds of exception are set out in the Notice 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 C laim 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
3 Excipient’s Heads of Argument, para 10, pages 8 – 9.
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would not have been obtain ed 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.
(c) The Plaintiff is the sole member of Jamal and Brothers 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 exce ption 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.
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Issues for determination
[9] The issues for determination can be summarised as follows:
(a) Whether there has been compliance with Rule 23(3);
(b) Whether the E xcipient is permitted to anchor its exception on points of law
and
(c) Whether the Particulars of Cl aim make the necessary averments to sustain
the Plaintiff’s causes of action?
Legal Principles
[10] 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 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.
4 Number Two Piggeries (Pty) 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
(Pty) Ltd and Others v Matthews 2021 ZAGP JHC 693 (16 November 2021), at para 8; Number Two Piggeries
(Pty) 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
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(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
(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:
6 Barclays Bank International Ltd v African Diamond Exporters (Pty) Ltd (2) 1976 (1) SA 100 (W).
7 Van der Westhuizen v Le Roux 1947 (3) SA 385 (C) at 390.
8 Fairoaks Investments Holdings (Pty) Ltd v Oliver 2008 (4) SA 302 (SCA) at para [12].
9 Telematrix (Pty) Ltd t/a 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 1998B.
10 Jowell v Bramwell-Jones and Others 1998 (1) SA 836 (W) at 902 J.
11 Jowell (supra) at 900 J; See also Purdon v Muller 1961 (2) SA 211 (A) at 214 e – 215.
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‘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 Defendant: 12:
(a) No mention is made of the facta probanda to be pleaded for a claim based on
ECR 22D(b) read with ECR 22B, 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;
(d) The Excipient failed to cite any authority that su pports 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) will be fatal to an exception unless condonation is applied for and
granted. In this regard, it was contended that the Excipient did not make a ny
application for condonation as envisaged in Evergrand Trading (Pty) Ltd14.
12 Index: First Defendant’s Exception, paras 1 - 3, pages 20 - 21.
13 Index: First Defendant’s Exception, para 4, pages 21 - 23.
14 (54068/2020) [2022] ZAGPPHC 739 (3 October 2022) para 57.
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[14] It is trite that t he 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 step. The Excipient made this submission without having raised it in
the Notice of Exception. As a result, I 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 which the exception is founded. I
15 [2001] 3 All SA 331 para 6.
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am mindful that in matters where the exception is based on an absence of a cause of
action, the court is beholden to deal with 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
Tshwane Metropolitan Municipality v Number Two Piggeries (Pty) Ltd 16.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 Plaintiff's 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 wit h 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
ECR in an endeavour to illustrate the basis for which it alleges that the Plaintiff’s
claim lacks a cause of action. I t 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] ZAGPPHC 274 (21 April 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 whole 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 (Pty) Ltd (supra) at para 12.
18 Index: Exception, pages 20 – 23.
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[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 conclus ions 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 read as a whole and that no paragraph is to be read in isolation. Caution
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"
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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 which the Excipient has chosen to couch the Notice 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 regar d 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 CIPC 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
21 Index, CIPC, Annexure “E1”, page 26.
22 In Baliso v FirstRand Bank Ltd t/a Wesbank 22, it was 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’.
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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] Whilst it is so that a special p lea 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
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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 E xception 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
[25] It is apparent that t he 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”.25
[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,
23 First Defendant’s / Excipient’s Heads of Argument, para 13, page 13.
24 Index: First Defendant’s Exception, para 4.2. page 22.
25 Excipient’s Heads of Argument, para 13.
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(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:
‘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
26 (CCT121/14) [2015] ZACC 31 (30 September 2015) at para
27 Mazibuko and Others v City of Johannesburg and Others [2009] ZACC 28; 2010 (4) SA 1 (CC); 2010 (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:
16
[29] The judgment of Bato Star Fishing (Pty) Ltd v Minister of
Environmental Affairs 28 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 concis e
justifications for exempting particulars of c laim, and that these assertions should
establish factual grounds. 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
“[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 Bato Star Fishing (Pty) 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’
17
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 his address that the court should
contemplate the provision of alternative relief. Counsel for the Plaintiff argued that no
alternative relief exists and that alternative relief in the case of an exceptio n is not
permitted in law and is a deviation of the trite rules governing exceptions which is to
either to 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.31 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 principles
regarding exceptions.
[33] In addition, Counsel for the Plaintiff also challenged the submission
made on behalf of the Excipient during argument that the Pl aintiff has not challenged
the c onstitutionality of the Regulations. This too, was not pleaded in the Notice of
30 TSI Communications CC v Omega M Projects (2022/13169)[2023]ZAGPJHC 1081 (27 September 2023) at para
7.
31 Inkin v Borehole Drillers 1949 (2) SA 366 (A) at 373; Alphina Investments Ltd v Blacher 2008 (5) SA 479 (C) at
483D; TSI 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.’.
18
Exception. Consequently, this C ourt, 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.
[34] 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. 32 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 for any violation thereof which may (my
emphasis) have been committed by Jamal and Brothers CC’33
[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 Another 34 explains the purpose and historic origin of
32 Plaintiff’s Heads of Argument, para 65, page 15.
33 Index: Particulars of Claim, para 18.3, page 9.
34 2015 (5) SA 146 (CC) at paras 53 – 54.
[1] ‘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 Regulations 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 10’s very heading is “Restriction on Export of Capital” . The measures were
19
the ECR. The matter of Yan Ling International Trade CC v South African
Reserve Bank35 is instructive with regards to the ECR. It is the Plaintiff’s contention
that an Exception 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. 36 The Court was referred to the relevant provisions encapsulated in
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.
[2] 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).’
35 [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 credit”.
The primary object of the Respondent, 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.’
36 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
20
Section 9(1) to 9(2)(c)37; 9(2)(d)(i)(aa) to (cc) read with 9(2)(d)(iii)(aa) to (cc) 38 of the
Currency Exchanges Act 39, as amended, to demonstrate that the Plaintiff can as a
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...art
37 ‘(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 goods referred to or defined in the regulations or
determined in terms of the regulations or any money or goods into which
such money or good have been transformed 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 any 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 and disposal
referred to in subparagraph (i) by the Treasury of any other money or goods
belonging to the offender, suspected offender or any other person in order
to recover an amount equal to the value of the money or goods recoverable
in terms of the regulations referred to in subparagraph (i), but which can
for any reason not be so recovered.
(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.’
38 ‘(d) Any regulation contemplated in paragraph (a) shall provide—
(i) that any person who feels aggrieved by any decision made or action taken by any person
in the exercise of his powers under a regulation referred to in paragraph (b) which has
the effect of blocking, attaching or interdicting any money or goods, may lodge an
application in a competent court for the revision of such decision or action or for any
other relief, and the court shall not set aside such decision or action or grant 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 deci sion 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
21
matter of law be held liable by merely being in possession of the funds which are
tainted. It was argued that even in instances where money 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 money is not tainted in
light of the fact that the Plaintiff is challenging forfeiture. In amplification , the
Excipient submitted that it was peremptory for the Plaintiff to have done so because
it is a requirement that flows from the ECR.
[38] The Excipient further contended that the Plaintiff has failed to plead
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 as
required in Section 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 may challenge a forfeiture
notice.
[39] The Plaintiff argued that Regulation 22D provides a remedy in the ECR
for a person aggrieved by the attachment or forfeiture of funds and challenges the
forfeiture of the money on the basis of the provision of Regulation 22D(d). The
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 Gazette and referred to in subparagraph (ii),
institute legal 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 have grounds to make such decision; or
(cc) that the grounds for the making of such decision no longer exist.’
39 Act 9 of 1933.
22
Plaintiff argued that the minimum factual requirements have been satisfied, and as
such, he is entitled to the relief 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 22B (1) or 22B (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 de layed 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 reliance 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. 40 The Plaintiff
submitted that the Particulars of Claim pleads two distinct causes of action to sustain
40 Index: First Defendant’s Exception, para 5, page 23.
23
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] The accepted legal principle is that a litigant is required to plead
material facts that are necessary to support his right to judgement. T he question
remains whether all the facta probanda have been pleaded. I t 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?41
[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.42
41 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 particularity to enable the opposite party to reply thereto.” ; See also, Alphedie Investments (Pty)Ltd v
Greentops (Pty)Ltd 1975 (1) SA 161 (T) at 161H; McKenzie v Farmers’ Co-operative Meat Industries Ltd 1922 AD
16 at 23; Evins v Shield Insurance Co Ltd 1980 (2) SA 814 (A) at 838E-F.
42 Theunissen v Transvaalse Lewende Hawe Koop Beperk 1988 (2) SA 493 (A); Lewis v Oneanate (Pty) Ltd and
Another 1992 (4) SA 811 (A) at 817; TSI 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 contends cannot be supported on every interpretation that can be put
upon the facts.’
24
[44] The matter of McKenzie v Farmers’ Co -operative Meat Industries Ltd 43
clearly defined meaning of a “cause of action”.
‘…every fact which would be necessary for the plaintiff to prove, if traversed,
in order to support his right to judgment of the court. It does not comprise
every 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.44 Furthermore, the court should not look at a pleading
“with a magnifying glass of too high power.’”45 Although the approach on exception
should not be overly technical and that regard is to be had to the pleadings, and
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 Tshwane Metropolitan Municipality In re: City of Tshwane Metropolitan
Municipality v Number Two Piggeries (Pty) Ltd 46.
[46] The Excipient contended that because 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
43 McKenzie v Farmers’ Co-operative Meat Industries Ltd 1922 AD 16 at 23.
44 First National Bank Southern Africa v Perry NO and Others (supra) at 972 I – J; Britz v Coetzee 1967 (3) SA 570
(T) at 571A-B ‘While 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.’
45 Kahn v Stuart and Others 1942 CPD 386 at 391.
46 See fn 1 Number Two Piggeries (Pty) Ltd v City of Tshwane Metropolitan Municipality In re: City of Tshwane
Metropolitan Municipality v Number Two Piggeries (Pty) Ltd (ibid), para 12.
25
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.47
47 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 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, 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 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 grounds 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 o therwise, 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 such act 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 which 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 such
place as it may deem fit;
(iii) any money or goods, notwithstanding the person 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 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 concerned 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;
(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 –
(aa) in respect of which a contravention or act or omission referred to in
subparagraph (i) has been committed;
(bb) which has been involved in a contravention or failure or act or
omission referred to in subparagraph (ii)(aa);
26
[47] Additionally, the Excipient contended 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 Claim expiable.
[48] The matter of Singh v South African Reserve Bank 48 clarifies
situations in which SARB suspects that a person has contravened the provisions of
the Regulations. Regulations 22A and 22C of the 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, while Regulation 22C applies to a blocking order in respect of funds
which are as yet untainted:
(cc) which has been obtained by any person or is due to him as referred to in
subparagraph (ii)(bb);
(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 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 accordance 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 appropriate 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 deal, without the permission of the Treasury and in accordance
with such conditions (if any) as may be imposed by the Treasury, in any manner determined
by the Treasury with the goods attached or any part thereof.
48 [2023] ZAGPPHC 112; 2020/35964 (20 February 2023).
27
‘[16] It is common cause that in terms of regulation 22A and/or regulation 22C
the SARB is empowered 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 22B, 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
George Hill Family Trust v SA Reserve Bank 49 is instructive 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”.
49 1990 (3) SA 704 at pages 710G – H, read with 711D.
28
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] Money which are not tainted may 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 MSG1
attached to the Particulars of Claim dated 3 August 2022. 50 The Plaintiff expressly
pleaded reliance on Regulation 22D in the Particulars of Claim wherein the following
averment is made:
’17. In accordance with Exchange Control Regulation 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.’51
[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
50 Index: Exception, page 12.
51 Index: Particulars of Claim, para 17, page 8.
29
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.’52
[53] In Trope v South African Reserve Bank and Two Other Cases 53 it
was stated:
‘A bare reference to a statute or set of regulations, without specifying the
particular section or regulation on which reliance 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 in conjunction with any other facts
on which reliance is placed.’54
[54] As previously stated the Plaintiff has averred, that his claim is
predicated on Regulation 22D(b) and that Regulation 22A a s 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 encapsulated in the Notice, namely
Regulation 22B made under Section 9 of the Currency and Exchanges Act . The
Plaintiff has placed reliance on Regulation 22B as is borne out by the Particulars of
Claim:
52 Index: Particulars of Claim, para 19, page 10.
53 1992 (3) SA 208 (T).
54 Page 211E-G.
30
‘5. On or about 2 August 2022, the First and/or Second Defendant,
represented by its delegate, being the Deputy Governor of the First
Defendant, acting pursuant to powers granted by the provisions of
Exchange Control Regulations 22B made under section 9 of the
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 made. 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 referred to in paragraph (a), (b) or (c) of Regulation 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.
31
[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)55 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 facts 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 whether Particulars of Claim, as it stands, has
been sufficiently formulated to enab le 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 b e cured by Further Particulars as the pleader is to
plead with particular particularity.
[60] I am therefore of the considered view that the Plaintiff has failed to
plead the necessary and essential averments as required in the Regulations 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 money was 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).
55 At para 9.
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[61] Even if I am wrong, t he Plaintiff 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, renders
the Plaintiff’s Particulars of Claim excipiable on this basis alone as there has been
non-compliance with the statutory provision invoked by the Plaintiff.
Alternative Relief common law relief
[62] The Plaintiff made the following averments in the Particulars of Claim:
‘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, and 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
Fund at the expense of the Plaintiff who is impoverished by reason
of the loss of the monies standing to his credit in the two bank
accounts mentioned in MGS1 at paragraphs 2.1 and 2.2 in
33
circumstances where the State’ s enrichment is unjustified in fact
and/or in law.’56
[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
compensate r 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 t hat 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 fo r 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.57 The Plaintiff contended that 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 entitled to the unjust enrichment claim upon which the Plaintiff’s
56 Index: Exception, Particulars of Claim, paras 13, 15 – 16, page 8.
57 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
plaintiff to assess whether they disclose a cause of action…’.
34
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:
‘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
pleading’58
[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 December 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
58 At para 8
35
consideration for the trial court a s it extends beyond the scope of this exception as
was earlier mentioned.
Discussion
[68] It is trite is that an exception can be taken where pleadings are vague
and embarrassing or lacks averments which are necessary to sustain an action or
defence.59 The failure to seek relief in the alternative renders the Particulars of Claim
excipiable on the basis that it is vague and embarrassing. The question to be
answered is therefore whether this court could deal with the ground of vague ness
and embarrassing if it was not specifically pleaded, bearing in mind, as earlier
mentioned that an Excipient is obliged to confine his complaint to the stated grounds
of its exception.
[69] The Excipient illuminated what it termed, as an obvious ambivalence or
contradiction in the Particulars of Claim where it is stated that the “Plaintiff is the
depositor of the funds held in the two banking accounts…”60 Plaintiff goes on state
that the “Plaintiff is entitled to the benefits of ownership of the funds held in the two
banking accounts…”61 Later the Plaintiff avers:
‘The advance payment(s) referred to by the First Defendant as disclosed to
Plaintiff during the investigation by First Defendant and referred to in para
18.1 above was not made by the Plaintiff but by Jamal Brothers Fashions CC
(registration no. 2006/002518/23), a juristic entity separate and distinct from
Plaintiff, which entity has not rights or claims to any of the monies declared
forfeited to the State as per the Notice in MGS1’ 62
59 Rule 23 of Uniform Rules of Court, See also Children’s Resource Centre Trust and Others v Pioneer Food Pty
Ltd and Others 2013 (2) SA 213 (SCA) at para 36.
60 Index: Exception Paragraph 9 of the Plaintiff’s Particulars of Claim, page 7.
61 Index: Exception Paragraph 10 of the Plaintiff’s Particulars of Claim, page 7.
62 Index: Particulars of Claim, paras 18.1 – 18.3. page 9.
36
[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
which have been committed by Jamal and Brothers CC. 63 The Plaintiff contended
that the Excipients 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.64
[71] The Plaintiff conceded that there 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.’65
[72] Although the court indicated that alternative relief would not be
considered which was not pleaded with particular particularity, it is apparent that
63 Index: Exception, Particulars of Claim, para 18.3, page 9.
64 Number Two Piggeries (Pty) Ltd v City of Tshwane Metropolitan Municipality In re: City of Tshwane
Metropolitan Municipality v Number Two Piggeries (Pty) Ltd (ibid) para 8:
‘In Trope v South African Reserve Bank the following was said about an exception relying on the allegation
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 embarrassment of such a nature that the excipient is prejudiced (Quinlan v MacGregor 1960
(4) SA 383 (D) 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 important, test – see the remarks of Conradie J in
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 ways 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 that such a pleading is excipiable as being vague
and embarrassing – see Parow Lands (Pty) Ltd v Schneider 1952 (1) SA 150 (SWA) at 152F – G and the
authorities there cited. 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 pleading.”.’
65 Plaintiff’s Heads of Argument, para 66, page 15.
37
there appears to be other deficiencies in the Plaintiff’s Particulars of Claim that may
render t he 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 other legal remedies available to
deal with the highlighted deficiencies.
Conclusion
[73] It is pellucid that the Plaintiff had to bear out a cause of action in terms
of the Regulations as relief is sought 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 Particulars 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 distilled in the referenced legislation which are
interrelated and sufficiently supported by case law as demonstrated earlier in this
judgment. As such, it is manifest that the facts as pleaded by the Plaintiff does not
align with the applicable law. Regard is to be had to the purport, object and entire
context within which the Plaintiff has 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 22B 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
38
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 without 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 view that a dismissal o f the action at this
stage would be premature with concomitant far-reaching consequences . There
appears to be a number of issues that require thorough ventilation in a trial in due
course. This view is furthermore predicated on the relief sought as it is currently
framed, which includes the setting aside of the decision to declare funds forfeited,
the publication of the forfeiture and the publication of such declaration as envisaged
by ECR 22D(b) , which 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 circumvented
to establish a cause of action in terms of the common law.
[77] The onus rests on the Excipient 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. I am therefore satisfied that the
exception falls to be upheld on the main relief sought.
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APPEARANCES:
Counsel for the Plaintiff: Prof. Fareed Moosa
Instructed by: Moosa & Pearson Inc.
Counsel for the First Defendant: Advocate T Govender
Instructed by: Macrobert Incorporated
Heard on 01 November 2023
Delivered 02 January 2024 – This judgment was handed down electronically
by circulation to the parties’ representatives by email.