Armbruster and Another v Minister of Finance and Others (CCT 59/06) [2007] ZACC 17; 2007 (6) SA 550 (CC); 2007 (12) BCLR 1283 (CC) (25 September 2007)

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[2007] ZACC 17
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Armbruster and Another v Minister of Finance and Others (CCT 59/06) [2007] ZACC 17; 2007 (6) SA 550 (CC); 2007 (12) BCLR 1283 (CC) (25 September 2007)

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CONSTITUTIONAL
COURT OF SOUTH AFRICA
Case CCT 59/06
[2007] ZACC 17
MICHAEL
HERMANN ARMBRUSTER First Applicant
MA
TECHNOLOGIES CC Second Applicant
versus
THE
MINISTER OF FINANCE First Respondent
THE
DIRECTOR-GENERAL, DEPARTMENT OF FINANCE Second Respondent
THE SOUTH
AFRICAN RESERVE BANK Third Respondent
ANITA LOUISE
BIRKENBACH NO Fourth Respondent
Heard
on : 21 November 2006
Decided
on : 25 September 2007
JUDGMENT
MOKGORO
J:
Introduction
This
case deals with the seizure and forfeiture of foreign currency
under the Exchange Control Regulations
1
(the regulations) and the constitutional validity of the forfeiture
provision. It is an application for leave to appeal against
a
judgment and order of the Pretoria High Court.
2
Mr
Michael Hermann Armbruster is the first applicant; the second
applicant is MA Technologies CC, a closed corporation of which
Mr
Armbruster is the sole member. The first respondent is the
Minister of Finance; the second respondent is the Director-General
of the Department of Finance; the third respondent is the South
African Reserve Bank (SARB); and the fourth respondent is a manager
in the Exchange Control Department of the Treasury and the
functionary designated to apply and administer the regulations.
3
Background
On
18 June 2004, the first applicant was found in possession of a
large amount of foreign currency at a security checkpoint in
the
international departure section of O R Tambo Airport in
Johannesburg.
4
The currency, with a rand value of R102 675, 65, was subsequently
seized by a customs official of the Department of Customs
and
Excise of the South African Revenue Services (SARS).
Following
the seizure, the official, Mr Collen Khoza, made an affidavit
stating:
“
I asked him for proof from
an authorised dealer; he told me that he does not have the proof
since the money was not used from his
previous travel.”
On
23 June 2004 Mr Armbruster wrote to SARS explaining that he wanted
to take the money out of the country to expand his new business
in
the United Arab Emirates (UAE). The Treasury
5
responded in writing and informed him that the seizure was based on
his violating Regulations 3(1)
6
and/or 3(3)
7
and/or 3(6) and the currency would be forfeited under Regulations
3(5)
8
and/or 3(8), unless the Treasury decided that the currency would
not be forfeited and would be returned to him. Mr Armbruster
was
invited to make written representations to the Treasury on why the
currency should not be forfeited.
On
8 August 2004 Mr Armbruster made representations on affidavit
explaining that the money was meant for expanding his new UAE
business venture, that the money spent to buy the foreign currency
had been lawfully earned from his previous employment, and
included
his retrenchment remuneration. He added that he had had “bad
experiences” with South African commercial banks,
trying to
purchase foreign currency in the official way and had, over a
substantial period, been approaching German tourist groups
to
obtain foreign exchange from them. He had not kept detailed record
of these transactions. He says that it is only now that
he
recognises that his conduct might not have been entirely consistent
with the provisions of the regulations.
Less
than a week later, the applicants’ attorney sent another letter
to SARS stating that setting up business in the UAE would
cost
approximately R300 000, but the regulations generally prohibited
the transfer of this amount to foreign operations. Although
there
were procedures which he could have followed to legalise the
transfer, he was not aware of them and had not made any inquiries
in that regard as he had been under pressure of time. The letter
concluded:
“
5.1 . . . . The tax legally
owed by Mr Armbruster to the South African Revenue Services in
respect of the monies earned by him was
paid and the foreign
exchange obtained does not represent so-called ‘hot money’ or
funds gained from illegal activities.
5.2 Mr Armbruster has never
before contravened any laws of the Republic of South Africa or
Foreign Exchange Regulations.
5.3 To a large extent the
reason as to why Mr Armbruster contravened the Foreign Exchange
Regulations was ignorance. Had he followed
the proper procedure and
had he made a properly motivated application to yourselves he would
in all probability have been granted
permission to obtain the
necessary foreign currency so as to set up a sister company in the
United Arab Emirates.
5.4 In the event of the foreign
currency confiscated being forfeited Mr Armbruster will, by
implication, be penalised and/or fined
for an amount equal to this
currency, which, having regard to the nature of Mr Armbruster’s
offence/contravention seems inappropriate
as the punishment will not
suit the ‘crime’. In fact, it would impose a punishment that
would shock the South African society’s
norms of justice and
fairness.
5.5 It is our respectful
submission that a fine of approximately R2000.00 would be a suitable
punishment for the offence committed
and we would suggest that an
amount of R2000.00 of the foreign exchange confiscated be forfeited
to the State.”
The
Treasury by letter conveyed the reasons for its decision not to
refund the currency:
“
No annotation has been made
in the records of the South African Reserve Bank that any exemption
from the provisions of the Exchange
Control Regulations has been
granted to Mr Armbruster;
contraventions or suspected
contraventions of Exchange Control Regulations 2(1),
9
3(1)(a), 10(1)(c)
10
read with 22.”
11
(Footnotes added.)
The
applicants subsequently launched an application in the High Court
for essentially the review and setting aside of the Treasury’s
decision. The first and second respondents did not oppose the
application stating they would abide the Court’s decision.
The
SARB opposed the application stating that:
“
2.2 After considering all of
the abovementioned documentation and the applicable Exchange Control
Regulations in terms of the provisions
of Regulation 3(5), I made
the decision not to refund the foreign currency which had been
seized as I was of the opinion that the
facts before me justified
the retention of the foreign currency. My opinion was based on the
fact that contraventions of Exchange
Control Regulations 2(1),
3(1)(a) and 10(1)(c) read with Regulation 22 had been committed by
Mr Armbruster.
3.
3.1 I decided not to refund any
of the foreign currency which had been seized from Mr Armbruster in
view of the serious nature of
the offences.
3.2 In particular I considered
the following facts and circumstances as indicative of the
seriousness of the offences:
3.2.1. Mr Armbruster, on his
own admission, had purchased foreign currency from German tourists
and not from an Authorised Dealer.
3.2.2 He did this even though
he had previously purchased foreign currency from The Standard Bank
of South Africa Limited and must
have been aware of the Exchange
Control requirements in this regard. However, he stated that he did
not do so on this occasion
because according to him ‘it was
time-consuming and expensive’.
3.3 He was also aware of the
current provisions of the Exchange Control Regulations applicable to
South African residents which
would prohibit him from transferring
the setting up costs of expanding his business overseas without the
necessary authorisation.
3.4 In the circumstances, I
found it unacceptable that the applicant did not officially apply
for prior authorisation from the
Exchange Control Department for the
abovementioned.”
Legislative
and regulatory framework
It
is convenient at this stage to outline the legislative and
regulatory framework relevant to the seizure and forfeiture of

foreign currency under the regulations. Section 9 of the Act makes
provision for the President
12
to make regulations regarding any matter that directly or
indirectly affects currency, its banking or its exchange.
13
For purposes of section 9 the “Treasury” means the Minister of
Finance or an officer in the Department of Finance who deals
with a
matter on the authority of the Minister and in this case the fourth
respondent.
14
The
Act empowers the Minister to make regulations that provide for
appropriate sanctions, either criminal or civil and for the
attachment of money which the Treasury suspects on reasonable
grounds to be involved in an offence or suspected offence in

contravention of the regulations.
15
Under Regulation 2(1) no person other than an authorised dealer
shall buy, borrow, sell or lend any foreign currency
16
to any person who is not an authorised dealer, except with the
Treasury’s permission and under conditions it imposes. An

“authorised dealer”, according to the regulations, would be a
person authorised by the Treasury to deal in foreign exchange.
17
According
to Regulation 3(1),
18
a person may not take or send foreign currency out of the country
unless exempted by the Treasury or a person it authorised.
For
that reason anybody about to leave the country must on request by
any customs or excise official, declare and produce currency
in his
or her possession.
19
Customs officials may therefore search persons and seize currency
in their possession, unless satisfied that a person is exempted
from the prohibitions under Regulation 3(1) or a certificate issued
by the Treasury is produced, showing that the removal of
the
currency is not in contravention of Regulation 3(2).
20
Currency seized under Regulation 3(3) “. . . shall be forfeited
for the benefit of the National Revenue Fund” according
to
Regulation 3(5).
21
Failure
to comply with the provisions of the regulations constitutes an
offence. The person would be liable to a conviction or
a fine not
exceeding R250 000 or in the case of an offence involving foreign
currency, the value of the currency whichever is
greater, or to a
period of imprisonment not exceeding five years or both.
22
The
High Court
The
applicants first brought an application for review of the
forfeiture but later changed the original prayer ultimately
requiring
an order which may be rendered as follows:
“
1. Declaring that the
decision by the first, third and/or fourth respondents taken on or
about 27 August 2004 in terms of regulation
3(5) of the Exchange
Control regulations . . . not to refund the foreign currency seized
from the first applicant on 18 June 2004
at Johannesburg
International Airport is inconsistent with the Constitution of the
Republic of South Africa 108 of 1996, unlawful
and invalid.
2. Reviewing and setting aside
the decision taken on or about 27 August 2004 . . . not to
refund in whole or in part the
foreign currency seized on or about
18 June 2004.
3. Ordering the third
respondent to return to the applicants the foreign currency seized
on or about 18 June 2004 from the first
applicant at the
Johannesburg International Airport.
4. In the alternative, and in
addition to the relief sought in paragraph 1, 2 and 3 above,
declaring that Regulation 3(5) of the
regulations is inconsistent
with the Constitution and invalid.”
Prinsloo
J held that ignorance of the provisions of the regulations was no
defence
23
and that the applicants’ submission that he did not know he was
acting illegally, was false.
24
He concluded that:
“
In all these circumstances,
I have come to the conclusion that the first applicant, on his own
evidence, and over an extended period,
acted in breach of the
prescribed Exchange Control Provisions, knowing that his conduct was
unlawful. He did so for reasons of
expediency, such as the ability
to negotiate lower and more favourable exchange rates, and he did so
repeatedly and over a long
period. When he was caught red handed by
Mr Khoza, he tried to slip out of the net by telling a blatant
lie.”
25
Approaching
the application for review as essentially an application under the
Promotion of Administrative Justice Act (PAJA),
26
the Court rejected the applicants’ contentions.
27
These contentions were that the forfeiture decision was taken in
an arbitrary and irrational manner in that the fourth respondent’s
decision not to return the currency “fell foul of . . . the
provisions of the Promotion of Administrative Justice Act of 2000
(‘PAJA’) for a variety of reasons”:
28
it
was procedurally unfair;
it
was materially influenced by an error of law;
irrelevant
considerations had been taken into account in so far as the
applicants’ rights had not been properly considered when
the
proportionality of the forfeiture had been compared to the
violation; and
the
fourth respondent had not taken the decision herself.
29
The
Court held that there was no merit in these considerations: the
fourth respondent had considered the relevant factors, had
not
taken irrelevant factors into account, and had taken the decision
herself.
30
Counsel
for the applicants submitted that they also place reliance on
section 6(2)(d) of PAJA,
31
which provides for judicial review of administrative action if it
has been materially influenced by an error of law. The error
of
law was said to be the fourth respondent’s failure to realise
that her decision amounted to the imposition of a penalty.
32
In this regard the Court held that the “confiscation” occurred
by operation of the regulations and was effected by an appropriate
officer in terms of the regulations and not as a result of the
fourth respondent’s decision.
33
It held “the decision not to refund the foreign currency is not
disproportional to the gravity of the offences committed by
the
first applicant.”
34
It concluded that the applicants had failed to make out a case for
the review of the fourth respondent’s decision.
35
It followed that the applicants had not made out a case for the
return of the currency.
In
relation to that prayer, the court held that in terms of section
8(1)(c)(ii)
36
of PAJA, a review court should only in
exceptional circumstances
substitute or vary the administrative action taken by an official
as opposed to remitting the matter for reconsideration. It
held
that no such special circumstances existed.
37
The
applicants also challenged the constitutionality of Regulation
3(5): first on the basis that it violates their rights not
to be
deprived of property except in terms of a law of general
application, which is not arbitrary, under section 25(1)
38
of the Constitution,
39
and second infringes the right to have a dispute resolved by a fair
and impartial tribunal under section 34
40
of the Constitution.
41
Regarding
the constitutionality of Regulation 3(5), the Court found that
section 34 of the Constitution had not been violated
because any
person who felt aggrieved by the attachment of money could bring an
application for review before a court of law.
42
In addition, the Court held, a decision by the fourth respondent
under Regulation 3(5) constituted administrative action, implying
that any person aggrieved by the decision could apply for judicial
review under the relevant provisions of PAJA.
43
Also dismissing the application on the basis of section 25(1) of
the Constitution, the Court found that the deprivation of property
in question was pursuant to the Act as a law of general application
and was therefore not arbitrary.
44
Applicants
sought leave to appeal to the Supreme Court of Appeal. The High
Court dismissed the application. At the time, the
Van der Merwe
matter dealing with similar legal questions was before this Court
on appeal from the full Court of the Cape High Court.
45
Consequently, the applicants applied for leave to appeal directly
to this Court against the High Court decision. The Chief
Justice
directed that this matter be heard on the same date as that of the
Van der Merwe
matter.
In
this Court
The
applicants argue that Regulation 3(5) provides officials such as
the fourth respondent with a discretion to forfeit property,
which
they submit is a punishment, without guidelines to show how the
discretion is to be exercised. This they contend, violates
section
25(1) of the Constitution, which guarantees the right not to be
arbitrarily deprived of property; section 165(1) of the
Constitution, which vests the judicial authority of the Republic in
the courts; and section 34 of the Constitution, which guarantees
the right of access to court.
The
application for leave to appeal
In
determining whether leave to appeal is to be granted, two issues
arise: does the application raise a constitutional issue?
If it
does, is it in the interests of justice to grant leave?
46
In making this determination this Court exercises its discretion.
47
The
applicants contend that Regulation 3(5) is unconstitutional in that
it violates sections 34, 25(1), and 165(1) of the Constitution.

Indeed the judgment of the High Court, refusing to set aside the
decision of the fourth respondent not to return the foreign
currency, was not mentioned at all until after the respondents drew
attention to this in their written argument before this Court.
The
applicants then tried to resuscitate this ground in a supplementary
note. A single sentence is devoted to the issue. It
reads:
“
In any event, even if this
Court does not uphold the applicants’ arguments concerning the
constitutionality of regulation 3(5),
it is submitted that the
decision of the fourth respondent not to return or refund the
foreign currency seized falls to be reviewed
for the reasons set out
in the founding papers as read with the answering affidavit.”
Nothing
is advanced in support of any contention that the High Court
judgment was wrong in this respect.
I
consider first the application for review of the decision of the
fourth respondent. The application for leave to appeal does
not
mention this at all, and as I have pointed out, nor does the
applicants’ argument. The single sentence in the supplementary
argument does not take the matter any further. There is no
application for leave to appeal in relation to this aspect before
us and therefore no warrant for any further consideration of this
matter.
The
application for leave to appeal in relation to the
constitutionality of Regulation 3(5) is another matter altogether.
Regulation
3(5) could result in the administrative forfeiture of
very large sums of money and could, as appears later in this
judgment,
cause undue hardship and injustice. Whether the
Constitution permits the forfeiture provided for in the
regulations, as well
as issues concerning the nature and effect of
the discretion afforded to the official who decides on the return
of the currency,
raise constitutional questions of some importance.
The
question whether forfeiture under Regulation 3(5) occurs
automatically and immediately the foreign currency is seized or

whether it results from a decision by the official concerned not to
return the foreign currency is also an issue that raises important
constitutional implications. This is because forfeiture of foreign
currency amounts to deprivation of property and the process
by
which forfeiture occurs could have a bearing on the issue of
whether the deprivation is arbitrary. Moreover there are
conflicting
decisions in the High Courts concerning this issue.
48
It is accordingly in the interests of justice to hear the appeal.
Leave to appeal must therefore be granted.
Interpretation
of Regulation 3(5)
The
constitutional validity of Regulation 3(5) is attacked on various
grounds including the questions which relate to the exercise
of the
discretion by the Treasury not to return the foreign currency. To
decide these issues without first determining what
the regulations
mean would be difficult. There are two relevant aspects concerned
with the meaning of the Regulation, which
must receive attention.
The first is concerned with when and how forfeiture occurs while
the second is about the nature of the
discretion conferred upon the
Treasury by the Regulation. I look at each separately.
(a)
Forfeiture: when and how?
Prior
to the decision of the High Court in this case, the Pretoria High
Court had considered the interpretation of a regulation
equivalent
to Regulation 3(5) in
Action Engineering
. In addition, a
full Court of the Cape High Court considered the same issue in
Van
der Merwe
.
49
In
Action Engineering
50
the High Court considered Regulations 3(6)
51
and 3(8).
52
Except that they provide for seizure and forfeiture of South
African rands brought into the country, their provisions are

identical to those of Regulations 3(3) and 3(5) respectively. The
Court disposed of the forfeiture issue in a single sentence:
“
[I]t appears to be provided
in peremptory language that the money must be forfeited for the
benefit of the National Revenue Fund,
whereupon, the Treasury . . .
in its discretion, may direct that the money seized, or any portion
thereof may be refunded”.
53
This
brevity is not surprising because the High Court was in that case
not concerned with the question of precisely when and how
forfeiture would occur in terms of the regulations. The question
in
Action Engineering
was really whether the criminal courts
had rightly made a forfeiture order in respect of a large amount of
South African rands
that had admittedly been seized in terms of the
equivalent of Regulation 3(3).
Action Engineering
in fact
held that the criminal court forfeiture was incompetent because the
money seized in terms of the equivalent regulation
to Regulation
3(3) had been forfeited by the regulation equivalent to Regulation
3(5). The process of forfeiture did not call
for investigation.
54
The
Cape High Court in
Van der Merwe
55
followed the line adopted in
Action Engineering
,
56
and concluded that the foreign currency that had been seized was
forfeited to the state immediately. A full Court of the Cape
High
Court, disagreed with the reasoning of the High Court in
Action
Engineering
and held that although Regulation 3(8) provided, as
does Regulation 3(5), that foreign currency which has been seized
“shall”
be forfeited to the National Revenue Fund, the
forfeiture is subject to the Treasury’s discretion to return or
refund the currency
“so seized”.
57
The
full Court held that the forfeiture of the currency does not take
place until the Treasury has decided whether to forfeit
the
currency. It reasoned that if, as the respondents argue and
Action
Engineering
58
held, the forfeiture was automatic, the legislature would have used
the words “so forfeited” and not “so seized”. The
Treasury
must then exercise its discretion as to whether or not any or all
of the currency seized should be returned. Where
the Treasury
decides not to return the money, it will then be deemed forfeited.
The full Court concluded “it could [n]ever
have been intended
that an act of seizure could constitute a permanent deprivation
without any intervention from a body other
than the party seizing
the items.”
59
The
applicants support the approach of the full Court but they go a
little further. They argue that the regulations, properly
interpreted, provide the Treasury with discretion to forfeit the
currency. They contend further that the Treasury, in deciding
not
to return the currency, in effect makes the decision to forfeit it.
The
first and second respondents assert that the currency seized under
Regulation 3(3) is forfeited to the Treasury automatically
as a
consequence of the operation of Regulation 3(5). They argue that
the forfeiture is not a consequence of any decision by
the
Treasury. The Treasury decision is aimed at the possible
amelioration of the consequences of the forfeiture that has already
taken place. The respondents, it appears, support
Action
Engineering
and the Cape High Court in
Van der Merwe
.
The
third and fourth respondents, however, approach the matter somewhat
differently. They contend that forfeiture is not complete
until
the Treasury has exercised its discretion under Regulation 3(5) and
determined whether or not to return the seized foreign
currency.
But they contend, if the Treasury does not direct the return of the
currency the forfeiture is completed as a matter
of law. This
argument too tends towards supporting the judgment of the full
Court.
It
will be convenient for Regulations 3(3) and 3(5) to be set out in
full in order to facilitate an evaluation of the position
of the
parties. Regulation 3(3) provides:
“
Every person who is about to
leave the Republic and every person in any port or other place
recognised as a place of departure from
the Republic, who is
requested to do so by the appropriate officer shall—
(a) declare whether or not he
has with him any . . . foreign currency; and
(b) produce any . . . foreign
currency which he has with him;
and the appropriate officer and
any person acting under his directions may search such person and
examine or search any article
which such person has with him, for
the purpose of ascertaining whether he has with him any . . .
foreign currency, and may seize
any . . . foreign currency produced
or found upon such examination or search unless either—
(i) the appropriate officer is
satisfied that such person is, in respect of any . . . foreign
currency which he has with him, exempt
from the prohibition imposed
by subregulation (1); or
(ii) such person produces to
the appropriate officer a certificate granted by the Treasury which
shows that the exportation by such
person of any . . . foreign
currency which he has with him does not involve a contravention of
that subregulation.
No female shall be searched in
pursuance of this subregulation except by a female.”
Regulation
3(5) provides:
“
All . . . foreign currency
seized under subregulation (3) or (4) shall be forfeited for the
benefit of the National Revenue Fund:
Provided that the Treasury
may, in its discretion, direct that any . . . foreign currency so
seized, be refunded or returned, in
whole or in part, to the person
from whom they were taken, or who was entitled to have the custody
or possession of them at the
time when they were seized.”
In
my view, the foreign currency is not forfeited for the benefit of
the National Revenue Fund immediately upon seizure. Nor
is it
correct that the Treasury decision whether to return the currency
occurs after forfeiture and at a time when the foreign
currency is
already being held for the benefit of the Fund. On a proper
interpretation, forfeiture only occurs after the Treasury
decision
not to return the currency has been made. This conclusion is based
on four reasons.
First,
the regulations draw a distinction between seizure and forfeiture.
Regulation 3(3) provides for seizure while Regulation
3(5) is
concerned with forfeiture. This implies that forfeiture is seen as
something different from seizure. Any analysis that
equates
forfeiture and seizure would in my view be incorrect. Seizure is
what happens when the currency is taken under Regulation
3(3).
Regulation 3(5) provides that forfeiture of the seized items will
follow. Forfeiture does not occur at the same time
as the seizure
but after the seizure has taken place. Regulation 3(5) expressly
provides for “currency seized” to be “forfeited”.
In
addition, Regulation 3(5) further carves out a proviso to
forfeiture. The proviso is to the effect that forfeiture will not
occur in the circumstances covered by it: where the Treasury in its
discretion directs return of the seized currency. As the
full
Court correctly pointed out, Regulation 3(5) expressly provides for
the return of seized currency, not forfeited currency.
This again
implies that forfeiture will not occur until the Treasury has
determined whether or not to return the currency in
terms of the
proviso.
Third,
it must also be kept in mind that the decision to refund money
seized is at odds with the idea that forfeiture had occurred
immediately upon seizure. Forfeiture as a concept indicates
finality. There cannot be incomplete forfeiture: an item is either
forfeited or not. The suggestion of the third and fourth
respondents that forfeiture is only completed when the decision
whether
to return what had been seized has been made, is
accordingly contrary to the notion that forfeiture occurred
immediately upon
seizure.
Finally,
forfeiture immediately upon seizure is constitutionally
objectionable. While it is understandable that foreign currency
found to be in the possession of someone at the airport must be
seized immediately, there can be no reason to justify forfeiture
immediate upon seizure. Immediate forfeiture would mean that the
property is forfeited without giving the person concerned an
opportunity to be heard. The legislature could not have
contemplated this. In my view, Regulations 3(3) and 3(5) set in
train
a process. It begins with the seizure of foreign currency
followed by a decision by the Treasury whether or not to return
what
had been seized and ends with forfeiture immediately that
decision has been taken.
In
their contentions, the third and fourth respondents relied on
Minister van Onderwys en Kultuur en Andere v Louw
60
and
Phenithi v Minister of Education and Others
.
61
The Supreme Court of Appeal in both cases interpreted certain
legislative provisions to the effect that an employee who is absent
from work for 30 consecutive days without the consent of the head
of department is deemed to have been discharged on account
of
misconduct unless the employer directs otherwise. In neither of
these cases, it was held, was there any decision dependent
upon a
discretion. The third and fourth respondents contend that the
regulations in this case are of the same kind. I disagree.

Forfeiture of foreign currency is fundamentally different from the
concept of being deemed to have been discharged from employment.

There is also a fundamental difference between the employer
directing otherwise on the one hand and the Treasury making a

decision whether or not to return all or part of the currency on
the other.
When
foreign currency is seized in terms of Regulation 3(3), the
Treasury cannot neglect to make a decision whether what has been
seized ought to be returned. The regulations cannot mean that the
absence of a conscious decision on the part of the Treasury
would
lead to forfeiture by default as it were. The person from whom the
foreign currency was taken is entitled to a decision.
Forfeiture
does not occur until and unless that decision has been made.
Further, it is common cause that the decision to return
or not to
return is an administrative one with the result that the person
concerned must be given a fair opportunity to be heard
before the
decision is taken.
I
prefer the approach of the full Court and conclude that forfeiture
does not occur immediately upon seizure. I therefore hold
that
forfeiture only occurs when a decision of the Treasury is made in
relation to the return of the foreign currency seized
only after a
fair hearing has been afforded the person concerned.
(b)
The nature of the discretion
Applicants
also attack Regulation 3(5) on the basis that the discretion it
confers could lead to arbitrary deprivation of property
because it
is extremely wide and unfettered by any guideline. Whether
guidelines are necessary or appropriate in the circumstances
can be
decided if we first understand the purpose and nature of the
discretion that is conferred.
The
nature and purpose of the discretion cannot be gauged without an
appreciation of the purpose of the forfeiture provision itself
and
the context in which it is exercised. Once forfeited, the currency
is not returned. The purpose of forfeiture must be distinguished
from the purpose of seizure of the foreign currency. Once foreign
currency is seized, it can no longer be taken out of the country.

The purpose of forfeiture is in my view threefold. First, the
forfeiture of foreign currency has a deterrent purpose in that
it
gives a strong message to the person concerned and the public at
large that currency sought to be unlawfully exported will
be
forfeited. It has the effect of preventing that person or others
from attempting to export foreign currency. The second
purpose is
to ensure that the foreign currency is available to the police as
evidence in any criminal charge that might ensue.
The third and
final objective is to avoid unlawful possession of the foreign
currency being granted to anyone else not entitled
to it.
As
sensible as the forfeiture provision might appear to be, its
potential, if applied without exception, to wreak injustice and
cause undue hardship, is nevertheless real. The purpose of the
discretion is to avoid these unjust and unduly harsh consequences.

The Treasury official after looking at all the facts simply asks
herself: bearing in mind the seriousness of the foreign currency
contravention, will the decision not to return the currency in this
case result in serious injustice or undue harshness? This
approach
is mandated by the values of our Constitution which, in a broad
sense recognises and requires respect for the human
dignity and
equality of all.
Once
the person who faces forfeiture has made representations for the
return of some or all of the foreign currency, the decision-maker
is called upon to consider whether in all the circumstances
forfeiture will cause injustice or hardship. Ignorance, lack of
education, genuine mistake or lack of appreciation of the
consequences, or where there is some strong moral or other
justification
for the conduct might be important factors that need
to be considered. There is no closed list. The key factor is
whether an
ordinary person in the shoes of the official, aware of
the purposes of the measure, would say that the forfeiture of all
or some
of the seized currency would in the circumstances be unduly
harsh or unjust.
Regulation
3(5) and the courts
The
applicants contend that Regulation 3(5) is inconsistent with the
role that the Constitution envisages for the courts. In
particular
they contend that it violates the rights of access to courts
protected in section 34 of the Constitution, as well
as section 165
of the Constitution which reserves certain functions to the
judiciary. This is so, they say because the forfeiture
is punitive
by design and constitutes punishment at least in part.
Accordingly, they contend that section 34 requires access
to courts
before forfeiture happens while section 165 requires that
forfeiture be authorised by a court if it is to be valid.
Three
separate questions therefore arise. The first is whether the
Regulation authorises criminal punishment either wholly
or in part.
If this is so, two further questions need to be answered. The one
is whether the forfeiture provisions violate
section 34 of the
Constitution, and the other whether the Treasury has taken over a
judicial function mandated by section 165.
I deal firstly with the
question of whether the forfeiture constitutes punishment.
(a)
Is the forfeiture criminal punishment?
The
first and second respondents contend that the basis for the
forfeiture is that the person who is in possession of the currency
possesses it unlawfully in contravention of the regulations. The
person would therefore not be deprived of something which he
or she
was entitled to possess. The person is not being subject to a fine
or penalty, something which might follow from prosecution
at a
later stage. In recognition of the fact that the forfeiture might
have an unduly punitive effect, the Treasury is given
a power to
mitigate that effect by directing that the currency be returned in
whole or in part to the person who had lawfully
possessed it. The
third and fourth respondents also contend that the fourth
respondent, when considering whether part or all
of the foreign
currency should be refunded, must have regard to the punitive
consequences of the forfeiture.
Our
law provides for two types of forfeiture, civil and criminal. In
this case, we are dealing with civil forfeiture. This Court
62
has recently had the opportunity to consider civil forfeiture of
property in relation to Chapter 6 of the Prevention of Organised
Crime Act
63
(POCA) and has held that although civil forfeiture under these
provisions has a penal element, its main objective is to remove
the
incentive for crime and not to punish criminals.
64
Forfeiture
without conviction under the regulations is not analogous to
forfeiture under Chapter 6 of POCA. The forfeiture of
property
under POCA occurs only when a court has determined in civil
proceedings, on a balance of probabilities that the property
constitutes an instrumentality of the offence or proceeds of the
crime. As this Court has noted, POCA provides a unique scheme
for
forfeiting property in order to meet its specific objectives.
65
In this respect it is not comparable to the forfeiture of currency
under Regulation 3(5). The issue here is not one of
proportionality
but of possible mitigation. Thus, under POCA where
the seized property is the instrumentality of the crime, such as
the building
in which the crime is committed, questions of the
proportionality of the confiscation arise.
I
have already said that the objectives of forfeiture under
Regulation 3(5) are to deter commission of the crime, to prevent

unlawful possession of the currency and to have evidence for a
criminal trial.
66
However, any mechanism aimed at deterrence will probably have some
punitive effect. Therefore, although the forfeiture of currency
under Regulation 3(5) is designed to deter, it at least to some
extent, effectively penalises those who contravene the regulations.
Although it has this punitive effect, it is by no means a criminal
sanction. I am therefore satisfied that it is not criminal
punishment.
67
I conclude that the forfeiture does not amount to criminal
punishment and that the forfeiture is essentially civil with a

punitive element. With that in mind we can decide whether sections
34 or 165 of the Constitution have been violated.
(b)
Regulation 3(5) and section 34 of the Constitution
The
applicants argue that by permitting the Treasury official to
forfeit property and thereby inflict some punishment without
judicial oversight, Regulation 3(5) infringes section 34 of the
Constitution. The applicants add that because forfeiture of
property under the regulation amounts to punishment, judicial
intervention is necessary before the forfeiture occurs. They argue
that it is not sufficient for a court of law to review the fourth
respondent’s decision after the forfeiture has occurred.
The
applicants relied heavily on this Court’s decisions in
Chief
Lesapo v North West Agricultural Bank and Another
68
and
Zondi v MEC for Traditional and Local Government Affairs and
Others
.
69
In
Chief Lesapo
the fact the bank could cause the sale in
execution of its debtors property without resort to a court of law
resulted in it becoming
a judge in its own cause, the Court held.
70
This amounted to self-help. Expanding on the principle, this
Court in
Zondi
held:
“
Section 34, therefore,
requires not only that individuals should not be permitted to resort
to self-help, but it also requires that
potentially divisive social
conflicts must be resolved by courts, or other independent and
impartial tribunals. Section 34 recognises
that it is important to
do so to ensure that orderly and fair solutions to such conflicts
are found, to promote social cohesion
and to avoid the exacerbation
of division and unfairness. Determining whether it is necessary for
such conflicts to be brought
before courts will require a
consideration of the potential for social conflict in relation to
the particular matters concerned,
the equality of arms of the
parties that are likely to be involved in such conflict, and the
practicalities of requiring such matters
to be resolved by courts,
amongst other things.”
71
An
important purpose of section 34, it was held in
Chief Lesapo
is to guarantee the protection of the judicial process for persons
who have disputes that can be resolved by law.
72
Execution as a means of enforcing a judgment or order of court is
an incident of the judicial process. If the debt itself is
disputed, the seizure of property in execution of the debt must be
equally in dispute. In that case, allowing the creditor to
seize
and sell the property of the debtor in execution deprives the
debtor of the court’s supervision.
73
It was held, however, that the protection of section 34 extends to
the attachment and sale of a debtor’s property even in
the case
where there is no dispute as to the underlying obligation, and that
that protection extends to circumstances in which
property may be
seized and sold in execution including the control that is
exercised over sales in execution.
74
In
Zondi
Ngcobo J held that the protection of section 34 is
necessary in that instance “to ensure that the sale is conducted
in a manner
that enables the debtor to recover the value of the
property sold.”
75
There
are however significant differences between the case at hand and
the two cases referred to above. In both those cases,
the Court
found that the respective respondents were empowered to resort to
self-help in the sense that they could execute and
sell property
without a court order and without any judicial supervision in
respect of debts. In addition,
Zondi
had important social
conflict implications which this case does not have. When this
distinction was put to counsel he attempted
to persuade the Court
that forfeiture under Regulation 3(5) could also result in harsh
consequences for individuals who have
very little. I am willing to
assume in the applicants’ favour that Regulation 3(5) could in
certain circumstances have severe
consequences for persons who are
of limited financial means. That however, does not take the
applicants’ argument any further.
The distinction with
Zondi
to which the applicants’ attention was drawn was not the
impecuniosity of Mrs Zondi but rather that the impugned statutory
provisions had operated in a particular social and historical
context.
76
Needless to say, analogous considerations do not apply in the case
of Regulation 3(5).
Besides,
unlike
Chief Lesapo
and
Zondi
, this case does not
deal with the sale of property in execution without provision being
made for control or review by the courts.
In the first place, the
context is completely different. Seizure and sale of land for
non-payment of debt, or of cattle that
have strayed, are far more
drastic, and call for much greater immediate judicial control, than
forfeiture of currency about to
be sneaked unlawfully out of the
country. The property has already been seized to achieve public
purposes relating to protection
of foreign exchange reserves.
Furthermore,
under the Regulation we are faced with an administrative decision
of the Treasury official that is subject to review
by a court of
law on grounds of procedural fairness and substantive
reasonableness. In
Metcash Trading Ltd v Commissioner, South
African Revenue Service, and Another
77
this Court considered the constitutionality of, inter alia, section
36(1) of the Value-Added Tax Act
78
which provided that upon assessment by the Commissioner for the
South African Revenue Service, a taxpayer was obliged to pay
the
assessed tax regardless of a pending appeal, in common parlance,
pay now, grieve later. The Court held that unlike in
Chief
Lesapo
, section 36(1) did not permit self-help because a
decision of the Commissioner constituted administrative action and
could therefore
be appealed against to a special court.
79
The Special Court’s decisions could then be appealed against
either to a full bench of the High Court, or if leave was granted
by the presiding judge, to the Supreme Court of Appeal. There was
therefore no violation of section 34 of the Constitution,
the Court
held.
80
It follows that Regulation 3(5) does not infringe section 34 of
the Constitution.
(c)
Regulation 3(5) and section 165 of the Constitution
The
applicants submit that the forfeiture of currency under Regulation
3(5) amounts to the imposition of a penalty, a function
which,
under section 165 of the Constitution, can properly be exercised
only by the courts. I have already held that the forfeiture
does
not amount to criminal punishment. It is nevertheless necessary to
consider whether the fact that there is a punitive element
in the
forfeiture requires the decision to be made by a court.
Section
165 of the Constitution provides:
“
(1) The judicial authority
of the Republic is vested in the courts.
The courts are independent and
subject only to the Constitution and the law, which they must apply
impartially and without fear,
favour or prejudice.
No person or organ of state
may interfere with the functioning of the courts.
Organs of state, through
legislative and other measures, must assist and protect the courts
to ensure the independence, impartiality,
dignity, accessibility
and effectiveness of the courts.
An order or decision issued by
a court binds all persons to whom and organs of state to which it
applies.”
The
section vests judicial authority in the courts. Judicial power or
any power akin to it can therefore not be left to non-judicial
officers to exercise. In
De Lange v Smuts NO and Others
81
this Court found that the power to commit an unco-operative
witness to prison lay “within the very heartland of the judicial

power and therefore cannot be exercised by non-judicial officers.”
Relying
on
De Lange
, the decision of the Supreme Court of Ireland in
Reginald Deaton v The Attorney General and The Revenue
Commissioners
82
and the decision of the House of Lords in
R (on the
application of Anderson) v Secretary of State for the Home
Department
,
83
the applicants contend that to allow an official in the employ of
the executive to forfeit currency is to permit the Treasury
official to exercise a power which is judicial in nature. It is
therefore inconsistent with the principle of separation of powers.
I
do not agree.
Deaton
and
Anderson
are
distinguishable from the case at hand, in that they dealt with the
selection of punishment for the commission of an offence.
84
Although the forfeiture of currency has some punitive effect, and
the culpability of the affected person has to be taken into
account
when the discretion to forfeit is exercised, the Treasury official
does not impose any criminal punishment at all. What
the Treasury
official does is to exercise an administrative function in terms of
Regulation 3(5): she decides whether or not
the whole or part of
the currency must be returned. An aggrieved person may take the
decision on judicial review. One must
bear in mind that in our
system the right to lawful, reasonable and procedurally fair
administrative action is a constitutionally
entrenched right
85
which is given effect to in legislation.
86
Nor
can an analogy indeed be drawn between the power questioned in
De
Lange
and that impugned here.
De Lange
considered the
power to imprison in order to coerce co-operation, giving rise to
the loss of physical freedom. Here, the power
consists in deciding
whether the whole or part of foreign currency lawfully seized
should be returned to the affected person.
Whereas the process in
De Lange
was fundamentally judicial, the forfeiture of
currency illegally held in contravention of the regulations is
essentially administrative
in nature.
I
conclude therefore that section 165 of the Constitution is not
violated.
Does
Regulation 3(5) amount to arbitrary deprivation of property?
Finally,
the applicants contend that the forfeiture provided for in
Regulation 3(5) amounts to arbitrary deprivation of property
and
violates section 25(1) of the Constitution. More particularly,
according to the applicants, the violation arises from the
fact
that the exercise of the Regulation 3(5) discretion whether or not
to return the currency is wide and not subject to any
guidelines.
It
is convenient at this stage to reiterate the provisions of section
25(1) of the Constitution which provides:
“
No one may be deprived of
property except in terms of law of general application, and no law
may permit arbitrary deprivation of
property.”
Regulation
3(5) is a law of general application and its forfeiture provision
deprives people caught with unauthorised foreign currency
of that
currency. The question is whether that deprivation is arbitrary.
What constitutes arbitrary deprivation of property was
authoritatively determined by this Court in the case of
First
National Bank of SA Ltd t/a Wesbank v Commissioner, South African
Revenue Service and Another; First National Bank of SA Ltd
t/a
Wesbank v Minister of Finance
87
as follows:
“
Having regard to what has
gone before, it is concluded that a deprivation of property is
‘arbitrary’ as meant by section 25
when the ‘law’ referred
to in section 25(1) does not provide sufficient reason for the
particular deprivation in question or
is procedurally unfair.
Sufficient reason is to be established as follows:
(a) It is to be determined by
evaluating the relationship between means employed, namely the
deprivation in question and ends sought
to be achieved, namely the
purpose of the law in question.
(b) A complexity of
relationships has to be considered.
(c) In evaluating the
deprivation in question, regard must be had to the relationship
between the purpose for the deprivation and
the person whose
property is affected.
In addition, regard must be
had to the relationship between the purpose of the deprivation and
the nature of the property as well
as the extent of the deprivation
in respect of such property.
Generally speaking, where the
property in question is ownership of land or a corporeal movable, a
more compelling purpose will
have to be established in order for
the depriving law to constitute sufficient reason for the
deprivation than in the case when
the property is something
different and the property right something less extensive. This
judgment is not concerned at all with
incorporeal property.
Generally speaking, when the
deprivation in question embraces all the incidents of ownership,
the purpose for the deprivation
will have to be more compelling
than when the deprivation embraces only some incidents of ownership
and those incidents only
partially.
Depending on such interplay
between variable means and ends, the nature of the property in
question and the extent of its deprivation,
there may be
circumstances when sufficient reason is established by, in effect,
no more than a mere rational relationship between
means and ends;
in others this might only be established by a proportionality
evaluation closer to that required by section 36(1)
of the
Constitution.
Whether there is sufficient
reason to warrant the deprivation is a matter to be decided on all
the relevant facts of each particular
case, always bearing in mind
that the enquiry is concerned with ‘arbitrary’ in relation to
the deprivation of property under
section 25.”
In
the present case the relationship between the deprivation of
property and the purpose of the deprivation must first be
evaluated.
The Regulation permits the deprivation of foreign
currency that was unlawfully possessed for the purpose of unlawful
removal
from the Republic of South Africa. The purpose of the law
giving rise to the deprivation is to prevent violations of currency
exchange control regulations, and the unlawful removal of foreign
currency from South Africa. It aims to deter not only the
person
affected but also others. The connection between the purpose of
the deprivation, the property and the person deprived
could hardly
be closer. In all probability, the person who is in unlawful
possession of the currency is the owner or carries
the property at
the owner’s behest. Even though it is true that the owner could
possibly be deprived of all the currency in
his or her possession
at an airport, there is in this case sufficient reason for the
deprivation. Ordinarily, arbitrariness
would be out of the
question.
There
could, however, be exceptional circumstances that open the
Regulation to the charge of being so unremitting as to lend itself
to the production of arbitrarily harsh consequences. This is where
Regulation 3(5) comes in. It seeks to mitigate undue hardship
or
injustice by placing into the hands of the Treasury official an
effective tool: the discretion to return the whole or part
of the
money following representations by the affected persons.
The
discretion is contained in the proviso to Regulation 3(5). As
respondents contended, and as I have held,
88
the currency would be returnable in circumstances where it is
necessary to ameliorate undue hardship or injustice that might
be
perpetrated on the person affected. Furthermore, as I have pointed
out, the exercise of the discretion is subject to judicial
review.
The
question now is whether the absence of guidelines in the Regulation
nevertheless opens the way to subjective decision-making
by the
official concerned at the decision-making stage, resulting in
possible arbitrary deprivation of property. The possibility
of
subsequent review might be poor solace for a person whose money is
forfeited.
The
nature of the discretion provided to the official in the proviso of
Regulation 3(5) is undoubtedly wide. It confers upon
the official
the power to determine on application by the affected person
whether to have the whole or part of the currency returned
or
forfeited.
89
As O’Regan J observed in
Dawood and Another v Minister of
Home Affairs and Others; Shalabi and Another v Minister of Home
Affairs and Others; Thomas and
Another v Minister of Home Affairs
and Others
,
90
the nature of the administrative functions of officials is such
that it does not allow them time for considered reflection on
the
scope of constitutional rights or in what circumstances those
rights may be justifiably limited.
Respondents
submit that the discretion afforded to fourth respondent is not
uncircumscribed. On their interpretation of the Act
and the
regulations, the discretion under Regulation 3(5) is sufficiently
limited by section 9 of the Act and its objectives,
policies, the
stated government purpose, PAJA
91
and the Constitution.
The
respondents also contend that the discretion under consideration
falls under the exceptions set out in
Dawood
.
92
In that case, a broad discretion was found to be permitted, when
(a) the factors that are relevant to the decision are so numerous
and varied that it is inappropriate or impossible for the
legislature to identify them in advance; (b) the factors which are
relevant are indisputably clear; and (c) the decision-maker is
possessed of expertise relevant to the decision to be made.
93
In
my view the broad discretion afforded under the proviso is of the
kind envisaged in (a) contemplated in
Dawood
above. The
factors that must be taken into account in the process of avoiding
undue hardship or injustice are so varied and
numerous as not
easily to be identified in advance, as are the circumstances in
which people would unlawfully try to take money
out of the country.
Furthermore, the constitutionally protected interests at stake are
of a different order.
Dawood
involved the right to family
life and dignity of persons conducting themselves in a lawful
manner. In the present matter the
discretion relates to the return
of money lawfully seized after being unlawfully possessed. In
these circumstances subsequent
judicial review would not represent
an unjustified limitation on the right not to be deprived
arbitrarily of property.
I
must emphasise that there are two aspects in which a court would
have the power to review the exercise of a discretion. The
first
is a procedural one in which it will be necessary to ensure that
the affected person has been given an appropriate opportunity
to
make representations. The decision to forfeit cannot stand if no
such opportunity has been given. Secondly the court would
be able
to determine whether the decision-maker came to a reasonable
conclusion in relation to the issues of undue hardship or
injustice.
I
should add that although I do not think that the absence of the
guidelines is fatal to the Regulation itself, I do believe it
would
be prudent for the appropriate authority to formulate guidelines as
best they can to give as much assistance to the official
as
possible. This would ensure that the proviso under Regulation 3(5)
is consistently exercised in a way which reduces error.
Finally,
although nothing untoward in the conduct of the official in this
case has been established, it is necessary to underline
the fact
that officials are constitutionally bound, in the daily operation
of their role and functions, to observe the rule of
law and promote
the spirit, purport and objects of the Bill of Rights. The public
administration must always and in every sphere
be governed by the
democratic values and principles enshrined in the Constitution, and
services must be provided impartially,
fairly, equitably, and
without bias.
94
Costs
All
the arguments advanced on behalf of the applicants have failed.
Nevertheless the applicant has raised a number of questions
of
constitutional importance in a relatively undeveloped area of the
law. It would not be appropriate that he be ordered to
pay the
respondents’ costs.
Order
The
following order is made:
The application for leave to appeal is granted.
The appeal is dismissed.
There is no order as to costs.
Langa
CJ, Moseneke DCJ, Kondile AJ, Madala J, Nkabinde J, O’Regan J,
Sachs J, Van der Westhuizen J, Van Heerden AJ, Yacoob J concur
in
the judgment of Mokgoro J.
For
the Applicants: Advocate A Katz and Advocate M du Plessis
instructed by Meyer Inc.
For the First and Second Respondents: Advocate NGD Maritz SC and
Advocate JL Gildenhuys instructed by the State Attorney, Pretoria.
For the
Third and Fourth Respondents: Advocate NGD Maritz SC, Advocate JL
Gildenhuys and Advocate GM Budlender instructed by Newtons
Inc.
1
Promulgated
under section 9 of the Currency and Exchanges Act 9 of 1933 (the
Act), which empowers the Governor-General to make Exchange
Control
Regulations. The regulations were published under GN R1111 in
GG
Extraordinary
123 of 1 December 1961.
2
Michael Hermann Armbruster and
Another v The Minister of Finance and Others
Case No 6325/2005, 9 May 2006, unreported.
3
This
application was heard on the same day as that of
Gary
Walter Van der Merwe and Another v Inspector Taylor and Others
CCT 45/06 (the
Van
der Merwe
matter) which also concerned the seizure of foreign currency.
4
Then
called the Johannesburg International Airport.
5
SARS
is part of the Treasury.
6
Regulation
3(1) provides:
“
(1) Subject to any exemption which may be granted by
the Treasury or a person authorised by the Treasury, no person
shall, without
permission granted by the Treasury or a person
authorised by the Treasury and in accordance with such conditions as
the Treasury
or such authorised person may impose—
(a) take or send out of the Republic any bank-notes,
gold, securities or foreign currency, or transfer any securities
from the Republic
elsewhere; or
(b) send, consign or deliver any bank-notes, gold,
securities or foreign currency to any person for the purpose of
taking, sending
or removing such bank-notes, gold, securities or
foreign currency out of the Republic; or
(b)
bis
take any South African bank-notes into
the Republic or send or consign any such notes to the Republic; or
(c) make any payment to, or in favour, or on behalf of
a person resident outside the Republic, or place any sum to the
credit of
such person; or
(d) draw or negotiate any bill of exchange or
promissory note, transfer any security or acknowledge any debt, so
that a right (whether
actual or contingent) on the part of such
person or any other person to receive a payment in the Republic is
created or transferred
as consideration—
(i) for the receiving by such person or any other
person of a payment or the acquisition by such person or any other
person of property,
outside the Republic; or
(ii) for a right (whether actual or contingent) on the
part of such person or any other person to receive a payment or
acquire property
outside the Republic;
or make or receive any payment as such consideration;
or
(e) grant any financial assistance to any person in the
Republic, where as security for such financial assistance, the
person granting
the financial assistance in turn relies on any
security, guarantee, undertaking or financial assistance, directly
or indirectly
furnished by—
(i) any person resident outside the Republic; or
(ii) an affected person;
(f) grant any financial assistance to any person in the
Republic, where such person—
(i) is not resident in the Republic; or
(ii) is an affected person.”
7
See
para [38] below.
8
Id.
9
Regulation
2(1) provides:
“
Except
with permission granted by the Treasury, and in accordance with such
conditions as the Treasury may impose, no person other
than an
authorised dealer shall buy or borrow any foreign currency or any
gold from, or sell or lend any foreign currency or any
gold to any
person not being an authorised dealer.”
10
Regulation
10(1)(c) provides:
“
No
person shall, except with permission granted by the Treasury and in
accordance with such conditions as the Treasury may impose-
(c) enter into any transaction whereby capital or any
right to capital is directly or indirectly exported from the
Republic.”
11
Regulation
22 provides:
“
Every
person who contravenes or fails to comply with any provision of
these Regulations, or contravenes or fails to comply with
the terms
of any notice, order, permission, exemption or condition made,
conferred or imposed thereunder, or who obstructs any
person in the
execution of any power or function assigned to him by or under these
Regulations, or who makes any incorrect statement
in any declaration
made or return rendered for the purposes of these Regulations
(unless he proves that he did not know, and could
not by the
exercise of a reasonable degree of care have ascertained, that the
statement was incorrect) or refuses or neglects to
furnish any
information which he is required to furnish under these Regulations,
shall be guilty of an offence and liable upon
conviction to a fine
not exceeding two hundred and fifty thousand rand or to imprisonment
for a period not exceeding five years
or to both such fine and such
imprisonment; provided that where he is convicted of an offence
against any of these Regulations
in relation to any security,
foreign currency, gold, bank-note, cheque, postal order, bill, note,
debt, payment or goods, the fine
which may be imposed on him shall
be a fine not exceeding two hundred and fifty thousand rand, or a
sum equal to the value of the
security, foreign currency, gold,
bank-note, postal order, bill, note, debt, payment or goods,
whichever shall be greater.”
12
The
Act refers to the Governor-General who was the head of state at the
time they were promulgated. Today the Act must be read
as referring
to the President. The President can delegate the power to regulate
to the Minister of Finance.
13
Section
9(1) of the Act provides: “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.”
14
See
section 9(2)(f) of the Act.
15
Section
9(2)(b)(i)(aa) of the Act provides:
“
Any
regulation contemplated in paragraph (a) may provide for—
(i) the blocking, attachment and obtaining of
interdicts for a period referred to in paragraph (g) by the Treasury
and the forfeiture
and disposal by the Treasury of any money or
goods referred to or defined in the regulations or determined in
terms of the regulations
or any money or goods into which such money
or goods have been transformed by any person, and—
(aa) which are suspected by the Treasury on reasonable
grounds to be involved in an offence or suspected offence against
any regulation
referred to in this section, or in respect of which
such offence has been committed or so suspected to have been
committed”.
16
Many
of the regulations we are concerned with in this judgment refer to
commodities other than foreign currency. This judgment
will confine
itself to foreign currency.
17
See
Regulation 1.
18
Above
n 6.
19
Regulations
3(3)(a) and (b) in para [38] below.
20
Regulations
3(3)(b)(i) and (ii) id.
21
The
Regulations are set out in full in para [38] below.
22
Regulation
22 above n 11.
23
Above
n 2 at para 29. The High Court relied in this regard on
S
v De Blom
1977 (3) SA 513
(A) at 528D where it was held, in relation to
Regulations 2(1) and (3)(1)(a), that:
“
Deur
die publikasie in die
Staatskoerant
is
die publiek dus ten volle ingelig oor die prosedure wat gevolg moet
word in verband met toestemming om geld of juwele uit die
land te
neem en moet die betoog namens die appellante in hierdie verband
verwerp word.”
24
Armbruster
above n 2 at paras 24 and 27.
25
Id
at para 30.
26
3
of 2000.
27
Armbruster
above n 2 at para 40, Prinsloo J referred in this regard to this
Court’s decision in
Bato
Star Fishing (Pty) Ltd v Minister of Home Affairs and Others
[2004] ZACC 15
;
2004 (4) SA 490
(CC);
2004 (7) BCLR 687
(CC) at para 25, where it
was held that the cause of action for the judicial review of
administrative action now ordinarily arises
from PAJA, and not from
the common law as in the past.
28
Armbruster
above n 2 at para 35.
29
Id
at paras 35 and 39.
30
Id
at paras 38-40.
31
Id
at para 42. Section 6(2)(d) of PAJA provides: “A court or
tribunal has the power to judicially review an administrative action
if the action was materially influenced by an error of law.”
32
Armbruster
above n 2 at para 42.
33
Id
at paras 43-47.
34
Id
at para 42.
35
Id
at para 48.
36
Section
8(1)(c)(ii) of PAJA provides:
“
The
court or tribunal, in proceedings for judicial review in terms of
section 6(1), may grant any order that is just and equitable,
including orders setting aside the administrative action and in
exceptional cases—
(aa) substituting or varying the administrative action
or correcting a defect resulting from the administrative action; or
(bb) directing the administrator or any other party to
the proceedings to pay compensation”.
37
Armbruster
above n 2 at para 49.
38
Section
25(1) of the Constitution provides: “No one may be deprived of
property except in terms of law of general application,
and no law
may permit arbitrary deprivation of property.”
39
Armbruster
above n 2 at para 50.
40
Section
34 of the Constitution provides: “Everyone has the right to have
any dispute that can be resolved by the application of
law decided
in a fair public hearing before a court or, where appropriate,
another independent and impartial tribunal or forum.”
41
Armbruster
above n 2 at para 51.
42
Id
at para 56.
43
Id
at para 59. See also section 6 of PAJA.
44
Armbruster
above n 2 at para 61.
45
Above
n 3.
46
S
v Boesak
[2000] ZACC 25
;
2001
(1) SA 912
(CC);
2001 (1) BCLR 36
(CC) at paras 10-15. See also
Steenkamp
NO v Provincial Tender Board, Eastern Cape
2007 (3) SA 121
(CC);
2007 (3) BCLR 300
(CC) at paras 16 and 24-25;
AAA
Investments (Pty) Ltd v Micro Finance Regulatory Council and Another
[2006] ZACC 9
;
2007 (1) SA 343
(CC);
2006 (11) BCLR 1255
(CC) at para 26;
Alexkor
Ltd and Another v The Richtersveld Community and Others
[2003] ZACC 18
;
2004 (5) SA 460
(CC);
2003 (12) BCLR 1301
(CC) at paras 21-26;
National
Education Health and Allied Workers Union v University of Cape Town
and Others
2003
(3) SA 1
(CC);
2003 (2) BCLR 154
(CC) at para 25;
Phoebus
Apollo Aviation CC v Minister of Safety and Security
[2002] ZACC 26
;
2003 (2) SA 34
(CC);
2003 (1) BCLR 14
(CC) at para 9.
47
See for example
President
of the Ordinary Court Martial Lieutenant-Colonel Mardon NO and
Others v The Freedom of Expression Institute and Others
1999
(11) BCLR 1219
(CC) at paras 14-16.
48
Van
der Merwe and Another v Nel and Others
2006 (2) SACR 487
(C);
[2006] 4 All SA 96
(C) at paras 20-23;
Action
Engineering and Fencing (Pty) Ltd v Moyses NO and Others
2004 (5) SA 399
(T);
[2003] 3 All SA 263
(T) at para 15.
49
Van
der Merwe
above n 48 at para 15.
50
Action
Engineering
above n 48.
51
Regulation
3(6) provides:
“
Every
person who is about to enter the Republic and every person in any
port or other place recognised as a place of arrival in
the
Republic, who is requested to do so by the appropriate officer
shall—
(a) declare whether or not he has with him any South
African bank-notes; and
(b) produce any such bank-notes which he has with him;
and the appropriate officer and any person acting under
his directions may search such person and examine or search any
article
which such person has with him, for the purpose of
ascertaining whether he has with him any South African bank-notes
and may seize
any such bank-notes produced or found upon such
examination or search unless either—
(i) the appropriate officer is satisfied that such
person is, in respect of any South African bank-notes which he has
with him,
exempt from the prohibition imposed by subregulation 1
(b)
bis
; or
(ii) such person produces to the appropriate officer a
certificate granted by the Treasury which shows that the importation
by such
person of any South African bank-notes which he has with him
does not involve a contravention of that subregulation.
No
female shall be searched in pursuance of this subregulation except
by a female.”
52
Regulation
3(8) provides, in relevant parts:
“
All
South African bank-notes seized under subregulation (6) . . . shall
be forfeited for the benefit of the National Revenue Fund:
Provided
that the Treasury may, in its discretion, direct that any notes so
seized be refunded or returned, in whole or in part,
to the person
from whom they were taken, or who was entitled to have the custody
or possession of them at the time when they were
seized.”
53
Action
Engineering
above n 48.
54
Id
at para 19.
55
Van
der Merwe v Nel and Others
Case No 5902/04, 12 January 2005 unreported, at para 35.
56
Action Engineering
above n 48.
57
Van der Merwe
above n 48 at para 20.
58
Action
Engineering
above n 48.
59
Van der Merwe
above n 48 at para 23.
60
[1994] ZASCA 160
;
1995
(4) SA 383
(A).
61
2006
(11) BCLR 1314
(SCA); 2006 (27) ILJ 477 (SCA).
62
National
Director of Public Prosecutions and Another v Mohamed NO and Others
[2002] ZACC 9
;
2002 (4) SA 843
(CC);
2002 (9) BCLR 970
(CC) at para 15.
63
121
of 1998.
64
Mohamed
above n 62.
65
Id
at paras 14-17.
66
See
para [48] above.
67
See also
Nel v Le
Roux NO and Others
[1996] ZACC 6
;
1996 (3) SA 562
(CC);
1996 (4) BCLR 592
(CC);
1996 (1) SACR 572
(CC)
at para 11.
68
[1999] ZACC 16
;
2000
(1) SA 409
(CC);
1999 (12) BCLR 1420
(CC).
69
[2004] ZACC 19
;
2005
(3) SA 589
(CC);
2005 (4) BCLR 347
(CC).
70
Above
n 68 at para 20.
71
Above
n 69 at para 63.
72
Above
n 68 at para 13.
73
Id
at para 14.
74
Id
at para 15.
75
Above
n 69 at para 72.
76
Id
at paras 38-42.
77
2001
(1) SA 1109
(CC);
2001 (1) BCLR 1
(CC).
78
89
of 1991.
79
The
Special Income Tax Court is established by section 83 of the Income
Tax Act 58 of 1962 to hear appeals from decisions of the
Commissioner. As Kriegler J noted in paragraph 32 of his judgment,
the Commissioner is not a judicial body and decisions by the
Commissioner are therefore not judicial decisions, but rather
administrative in nature.
80
Metcash
above n 77 at paras 47-48.
81
[1998] ZACC 6
;
1998
(3) SA 785
(CC);
1998 (7) BCLR 779
(CC) at para 61.
82
[1963]
IR 170
(SC).
83
[2002]
4 All ER 1089
(HL).
84
Anderson
id at paras 5 and 7-8 dealt with inter alia section 61(1) of the
Criminal Justice Act 1967, which provided the Home Secretary with
the power to order the release of convicted murderers who had been
sentenced to mandatory life sentences. When imposing such a
sentence the trial court would fix a “tariff term”, which was
the minimum portion of the life sentence that the convicted murderer
had to serve before being eligible for parole. The length of the
“tariff term” was determined on the basis of the specific
facts
of each particular case. The tariff term was set on the advice of
the trial court and the Chief Justice; however the Home
Secretary,
in setting the tariff, was not bound by these recommendations and
had the ultimate discretion. The Court found that
allowing the Home
Secretary to determine the length of an accused’s sentence
amounted to a violation of article 6(1) of the European
Convention
for the Protection of Human Rights and Fundamental Freedoms which
provides that an accused has the right to a fair trial
by an
independent and impartial tribunal established by law.
85
Section
33 of the Constitution.
86
PAJA.
87
[2002] ZACC 5
;
2002
(4) SA 768
(CC);
2002 (7) BCLR 702
(CC) at para 100.
88
See
paras [49]-[50] above.
89
Regulation
3(5) para [38] above.
90
[2000] ZACC 8
;
2000
(3) SA 936
(CC);
2000 (8) BCLR 837
(CC) at para 46.
91
Respondents
do not specify the relevant provisions of PAJA. They probably
intended to rely on section 6 of PAJA which provides
for the
institution of proceedings in a court or a tribunal for the judicial
review of an administrative action and the grounds
upon which the
action may be taken.
92
Above
n 90 at para 53.
93
Id. See also
Affordable
Medicines Trust and Others v Minister of Health and Others
[2005] ZACC 3
;
2006 (3) SA 247
(CC);
2005 (6) BCLR 529
(CC) at para 33.
94
Section
195 of the Constitution.