IN THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA

In the matter of:
THE COMMISSIONER OF CUSTOMS AND EXCISE Appellant
and
CONTAINER LOGISTICS (PTY) LIMITED Respondent

And in the matter of:
THE COMMISSIONER OF CUSTOMS AND EXCISE Appellant
and
RENNIES GROUP LIMITED trading as RENFREIGHT Respondent

Coram: Hefer, Vivier, Nienaber, Plewman JJA and Farlam AJA
Date of hearing: 17 May 1999
Date of delivery: 28 May 1999

Constitutional law: Jurisdiction of the Supreme Court of Appeal in terms of Item 17 of Schedule 6
to Act 108 of 1996; Interim Constitution Act 200 of 1993 - whether common law grounds for
judicial review of administrative actions still exist. Customs and Excise: Commissioner’s decision
under s 99(2)(a)(iii) of Act 91 of 1964 - reasonable steps.

J U D G M E N T

Hefer JA

[1] The provisions of S101(5) of the interim Constitution, Act 200 of 1993, effectively precluded
the erstwhile Appellate Division of the Supreme Court of South Africa from adjudicating any
matter relating to the interpretation, protection and enforcement of the provisions of the interim
Constitution and even from determining the scope of its own jurisdiction whenever the
determination required constitutional interpretation.
[2] On 4 February 1997 the Constitution of the Republic of South Africa Act 108 of 1996
superseded the interim Constitution. Under the new Constitution the Appellate Division became
the Supreme Court of Appeal which has full appellate jurisdiction in constitutional matters, subject
to a further appeal in such matters to the Constitutional Court, and is the highest court of appeal
in other matters.
[3] The present appeals, in which identical common law and constitutional issues have been
raised, were heard together and may conveniently be disposed of in a single judgment. Where it
becomes necessary to distinguish between the respondents I will refer to the respondent in
appeal No 196/96 as "Conlog" and to the other respondent as "Renfreight". The appeals were
noted during March 1996 (ie before the new Constitution took effect) and relate to two decisions
taken by the Commissioner for Customs and Excise during December 1994 which were set aside
in review proceedings in the Transvaal Provincial Division during October 1995.
[4] Pending cases are regulated by Item 17 of the Sixth Schedule to the new Constitution which
provides that
"[a]ll proceedings which were pending before a Court when the new Constitution took effect, must
be disposed of as if the new Constitution had not been enacted, unless the interests of justice
require otherwise."
According to the judgment of this Court in Fedsure Life Assurance Ltd and Others v Greater
Johannesburg Transitional Metropolitan Council and Others 1998(2) SA 1115 (SCA) at 1126A-C
the decision whether the interests of justice require an appeal to be disposed of is taken ad hoc
having regard to the particular circumstances of the case. But that case was referred to the
Constitutional Court and part of that Court’s order is to the effect that
"in respect of constitutional issues under the interim Constitution which may in future come before
the SCA, including matters within the purview of s 24 of the interim Constitution, it is in the
interests of justice for that Court to exercise the jurisdiction conferred upon it by chap 8 of the
1966 Constitution."
(See the judgment reported under the same name in 1999(1) SA 374(CC) at 415D-F.)
[5] I do not regard this part of the order as a binding direction, firstly, because that part of the
judgment to which it relates is entirely obiter and, secondly, because the order itself amounts to
no more than a statement of the Court's view of the interests of justice. I share those views, but
the underlying policy considerations did not deter the legislature from depriving the Appellate
Division of constitutional jurisdiction in the interim Constitution; and, as Mahomed CJ said,
referring to the new Constitution in Fedsure at 1126A-B,
"[i]f this is what the lawgiver had intended (ie that this Court should assume jurisdiction to
adjudicate upon all constitutional issues irrespective of whether they arose before or after the
commencement of the new Constitution) it could easily have said so. It deliberately refrained from
doing so. What it directed was that pending proceedings must be disposed of as if the new
Constitution had not been enacted unless, in the particular circumstances of a particular case, the
interests of justice required otherwise."

This dictum appears in a unanimous judgment of this Court and we must follow it unless we are
convinced that it is plainly wrong. Far from being so convinced, I respectfully agree with it. What
accordingly has first to be decided is whether the interests of justice require the present appeals
to be disposed of.
[6] In urging us to do so, counsel on both sides mentioned the fact that the judgment of the Court
a quo was delivered more than four and a half years ago; that the hearing of the appeals was
delayed at the request of this Court pending the Constitutional Court's decision in the Fedsure
case; that huge amounts of money are at stake, and that the Commissioner and other interested
parties are awaiting the outcome in order to arrange their affairs in other matters. These are
weighty considerations; but what weighs with me even more, is the fact that the review
proceedings were brought on constitutional as well as common law grounds. That the
jurisdictional scheme under the interim Constitution was inexpedient and not apt became
particularly noticeable in appeals to the Appellate Division involving both common law and
constitutional issues. Rudolph and Another v Commissioner for Inland Revenue and Others was
a typical case. It was a relatively simple matter but, because it allegedly had a constitutional
dimension, the Appellate Division could only deal with it after a referral to the Constitutional Court.
(Three reported judgments in that case appear in 1996(2) SA 886 (A), 1996(4) SA 552 (CC) and
1997(4) SA 391 (SCA).) This might also be the fate of the present appeals if we were to refuse to
hear them at this stage. In my view the circumstances are such that the interests of justice
demand that we dispose of them.
[7] Although our jurisdiction derives from a provision of the new Constitution the constitutional
issues must be decided in terms of the interim Constitution. As mentioned earlier, the impugned
decisions were taken during December 1994 when the interim Constitution was in force and this
Court has already accepted the principle asserted by the Constitutional Court (eg in S v Mhlungu
and Others 1995(3) SA 867 (CC) and Du Plessis and Others v De Klerk and Another 1996(3) SA
850 (CC)) that the lawfulness or unlawfulness of conduct is determined by the applicable law at
the time it took place (see National Media Ltd and Others v Bogoshi 1998(4) SA 1196 (SCA) at
1218F-H).
[8] In view of the way in which administrative justice was dealt with in the interim Constitution, a
problem which should perhaps be addressed first, is whether an administrative decision may still
be reviewed on common law grounds. I find it convenient, however, to consider this question after
an examination of the nature and merits of the respondents’ complaints.
[9] The Commissioner’s decisions which form the subject matter of the appeals were taken under
s 99(2)(a) of the Customs and Excise Act 91 of 1964, as amended, which in effect renders agents
liable for the obligations of their principals. The respondents are clearing agents and the effect of
the Commissioner’s decisions was to hold them liable for the unpaid customs duties and other
charges in respect of goods which had been landed in Durban where they were cleared for export
to Mozambique. For a proper understanding of the facts and of s 99(2)(a) itself, it is necessary to
deal in some detail with the clearing process and the provisions of the Act relating to goods which
are landed in South Africa for delivery at a place beyond the borders of the common customs
area. The Act was amended in several respects after the events which gave rise to the review
proceedings and the relevant provisions will be rendered in their erstwhile form.
[10] What is known in ordinary language as "customs clearance", is referred to in the Act as "due
entry". Within a prescribed period after goods are imported the importer is required to make due
entry thereof in the prescribed form. This is done by submitting a bill of entry containing
particulars inter alia of the goods in question and the purpose for which they are being entered, to
the Controller (an official designated by the Commissioner for a particular area). At the same
time, unless the Controller allows a deferment, the duties due on the goods must be paid. If the
Controller is satisfied, a release order is issued. Goods entered for home consumption are
presumably released without further ado; what happens to them thereafter does not concern us.

Goods destined for a neighbouring country may be entered either for removal in bond (s 18) of for
storage in a customs and excise warehouse (s 18A) whence they may later be removed upon
due entry for export. In either case, if they are destined for a place beyond the borders of the
common customs area, there is an immediately liability to pay the duty but actual payment thereof
is conditional upon it being proved to the satisfaction of the Commissioner that the goods have
been duly taken out of the area. If proof is furnished within the prescribed time, the liability
ceases; if not, the duty is payable on demand. Goods removed in bond or for export from a
customs and excise warehouse may not be diverted without the permission of the Commissioner
to any destination other than the one declared on entry.
[11] During March 1992 the Commissioner demanded from each respondent payment of the
duties and other charges allegedly due in respect of goods which had been diverted contrary to
the provisions of ss 18 and 18A. How the demands came about emerges from what follows.
(a) It was the parctice of the Controller in Durban to accept copies of bills of entry, officially signed
and stamped at the border posts, as proof that the goods reflected therein had been removed
from the common customs area. This practice continued for many years without there being any
suspicion that it was being abused until a customs official happened to notice an apparently
irregular stamp on one of the returned documents. An investigation followed which eventually
revealed that fraud had been committed on a massive scale in connection with goods cleared in
Durban for export beyond the borders of the common customs area. Although it could not be
determined how the fraud was perpetrated, it became clear inter alia that the stamps and
signatures on some of the returned bills of entry were counterfeit and that the goods had never
left the common customs area. In 41 such cases the clearing had been done by Conlog and in
two others by Renfreight.
(b) Every bill of entry contains the name of, and is signed by someone on behalf of the importer or
exporter or remover who certifies that the particulars therein are true and correct and comply with
the provisions of the Customs and Excise Act. In the 41 cases referred to, the bills were signed
by a Conlog representative who described himself as the agent for the remover although in each
one Conlog’s name also appeared as remover. The two other bills were signed by a Renfreight
representative who described himself as the agent for the exporter but Renfreight’s name also
appeared therein as exporter.
(c) In terms of ss 18(6) and 18A(5) no entry for removal in bond or for export from a customs and
excise warehouse may be accepted from a person who has not furnished security to the
satisfaction of the Commissioner. Both respondents had standing security arrangements with the
Commissioner which they used, not only for their own benefit, but also to assist smaller clearing
agents who could not afford such a facility. According to the uncontested evidence it was
common practice for large operators to allow smaller ones to utilize their services and bond
facilities at a nominal fee. In such cases the former would complete the bills on information
supplied by the smaller operators, and would then handle the clearance. In all the 41 cases
mentioned earlier Conlog’s clearing instructions came from a company referred to in the papers
as Access Freight with which Conlog used to do this type of business. In the other two cases
Renfreight’s instructions came from a concern referred to in the papers as Anglo Dynamic. (There
is no suggestion of the involvement of either Access Freight or Anglo Dynamic in the fraud.)
[12] After receipt of the demands the respondents’ attorneys sought to persuade the
Commissioner that the respondents had acted all along as agents whose liability had to be
determined in terms of s 99(2)(a). Initially their attempts failed; but, after the respondents had
commenced proceedings in the Durban and Coast Local Division for a declaratory order and
interim relief and after he had taken legal advice, the Commissioner changed his mind and wrote
to the respondents’ attorneys:

"I have come to the conclusion that the provisions of Section 99(2)(a) of the Act may be
applicable, depending on whether your clients acted as agents or as principal. If your clients were
agents, then on this basis they are also liable. I have accordingly resolved that I am obliged to
give the matters raised in the proviso to Section 99(2)(a) consideration, accepting (without
deciding) for the purposes thereof that your clients acted as agents and not as principal ...Your
clients are hereby invited to make such further written representations to me as you deem
desirable in this regard."
[13] Further representations followed and the Commissioner eventually notified the respondents
of his decision. In both cases the reasons were the same. They appear in the following extracts
from the letter which Conlog received:
"It is customary, and is indeed practice, to accept that there exists a relationship of trust between
licensed clearing agents and my Office, and I have always accepted the position to be so and
have arranged the day to day administration of my Office based on such understanding. To hold
otherwise would require the physical examination of every consignment of goods imported into or
exported out of the Republic. This, in turn, would render the effective administration of imports
and exports quite impossible. The cost of administration would become prohibitively high and the
delays caused would seriously inhibit the flow of trade. Furthermore, this Office does not possess,
and was never possessed, of a large enough personnel to facilitate such extensive physical
examination of all consignments.
Clearing agents licences are issued annually in terms of the provisions of the Act. Every such
agent, including Conlog, must annually submit a form styled: ‘Application for licensing as a
clearing agent in terms of Section 64B(2) of the Customs and Excise Act, 1964.’ Such application
forms are duly completed signed and delivered to the relevant Controller.
Paragraph 8.1 of the application form, inter alia, provides as follows:
‘The applicant undertakes to institute adequate administrative measures to ensure that -
(a) the contents of all documentation submitted to the office are duly verified;’
Conlog has signed such applications every year. This office expects that clearing agents will
honour their undertakings...
Having carefully considered the representations made by and on behalf of Conlog and the
content of the papers before Court referred to hereinbefore, I have not been satisfied that Conlog
took all reasonable steps to prevent the non-fulfilment contemplated in section 99(2)(a) of the Act.
In this regard I paid particular attention to the facts and allegations set out at pages 16 to 20 of
Conlog‘s representations dated 13 July 1994. It struck me as particularly significant that Conlog
made no reference to the relationship of trust that exists between my Office on the one hand and
clearing and forwarding agents on the other hand. Conlog has failed to convince me that any
effort was made by it to ensure that the particulars on the Bills of Entry were indeed correct. In
particular Conlog did not endeavour to ascertain whether the purported consignees of the goods
in the declared country of destination even existed, or were in truth the consignees, or even
received the goods. No proof or evidence of any steps taken by Conlog in this regard was
submitted for my consideration. Nor did Conlog attempt to prove that payment for the goods had
been made and were received in the RSA. The body of evidence before me, taken as a whole,
suggests that Conlog has instituted no or inadequate administrative measures to ensure that the
contents of all documentation submitted to Customs are duly verified."

[14] The respondents’ case is essentially that the Commissioner did not properly apply his mind
to the question which he had to decide. In order to consider the validity of their contention it is
necessary to deal briefly with s 99(2)(a). It reads as follows:
"An agent appointed by any importer, exporter, manufacturer, licensee, remover of goods in bond
... shall be liable for the fulfilment, in respect of the matter in question, of all obligations, including
the payment of duty and charges, imposed on such importer, exporter ... remover of goods in
bond ... by this Act and to any penalties ... which may be incurred in respect of that matter:
Provided that such agent ... shall cease to be so liable if he proves to the satisfaction of the
Commissioner that -
(i) he was not a party to the non-fulfilment by any such importer, exporter ... remover of goods in
bond or other principal, of any such obligation;
(ii) when he became aware of such non-fulfilment, he notified the Controller thereof as soon as
practicable; and
(iii) all reasonable steps were taken by him to prevent such non-fulfilment."
[15] Of the three requirements of the proviso only the third is relevant because the Commissioner
accepted that the other two had been met. The words "such non-fulfilment" in par (iii) plainly
refers back to the non-fulfilment of a principal’s obligation mentioned in the main part of the
provision and in par (i). Although the section renders an agent generally liable for all his
principal’s obligations in terms of the Act, it is clear that the proviso relates in any given case only
to the unfulfilled obligation in that case. It follows that the question in the enquiry under par (iii)
must in every case be whether the agent has taken all reasonable steps to prevent the non-
fulfilment of the particular obligation which the principal has not fulfilled.
There was some debate in this Court on the question whether an exporter or remover is legally
obliged under ss 18 and 18A to take the goods in question out of the common customs area.
Obviously, his liability to pay the duty is not extinguished if he fails to do so, but it does not
necessarily follow that he has a positive obligation to remove the goods for which his agent may
be liable under s 99(2)(a). The Court a quo found that neither s 18 nor s 18A creates such an
obligation, but on the view that I take of the matter, it is not necessary to decide whether this is
correct. It must be stressed, however, that the Commissioner’s case was presented to this Court
on the basis that the respondents are liable for their principals’ obligation to remove the goods
from the common customs area. What the Commissioner accordingly had to decide was whether
they had taken all reasonable steps to prevent the diversion of the goods.
[16] A striking feature of the reasons for the decision is the emphasis on the respondents’
undertakings to institute adequate administrative measures. I pause to say that, in the letter to the
respondents’ attorneys inviting them to make representations for purposes of s 99(2)(a), the
Commissioner listed the documents which he would take into consideration. The respondents’
license applications did not appear in the list; but, after he had received the representations, the
Commissioner sent copies of the applications to the respondents’ attorneys and informed them
that he intended taking the contents thereof into account as well. His sudden interest in these
documents is explained by the particular significance which he attached to the relationship of trust
and by the concluding sentence of the quotation in par [13] which leave the reader in no doubt
that the Commissioner simply held the respondents to their undertakings. Such an approach was
plainly wrong. What he had to decide, was not whether the respondents had complied with their
undertakings, but whether they had taken all reasonable steps to prevent the diversion of the
goods. I say this because the enquiry under par (iii) is directed at the reasonableness of an
agent’s conduct and the mere fact that he has not complied with an undertaking to take adequate

measures to ensure the accuracy of documents submitted to the Controller can obviously not be
conclusive.
[17] Moreover, reasonableness in the context of par (iii) must be determined, as the
reasonableness of conduct has to be determined in many other fields of the law, by an objective
standard. Since the conduct of a member of the clearing and forwarding industry was under
consideration, the Commissioner had to take account of the customary functions of clearing
agents. Apart from the respondents’ own allegations about the customs of the industry, there is a
supporting affidavit by Mr AJ Cowell before us. According to Mr Cowell (who has been active in
clearing and forwarding for forty nine years), a clearing agent’s function is "to pass the necessary
documentation in respect of clearing goods"; what is expected of him, is a verification of
documents from documents, that is to say, the contents of documents submitted to the Controller
must accord with the contents of documents in the agent’s possession; in all transactions the
agent "relies on the honesty and integrity of those persons supplying the information needed to
prepare and submit the necessary documentation"; for various reasons, it is unreasonable and
contrary to the general methods accepted world wide to expect of an agent to make enquiries in
other countries to verify the existence and identity of the consignor and consignee; and the
Commissioner has never in the past required such enquiries to be made. This was admittedly
said in an affidavit attached to the respondents’ replying affidavits but the Commissioner did not
seek leave to reply nor did he apply to have the affidavit struck out. The allegations stand
uncontradicted and are supported by s 64B(2) of the Act which provides that
"[t]he Commissioner may, subject to such conditions as he may in each case impose, license any
person applying therefor and approved by him, as a clearing agent for making entry of or
delivering a bill of entry relating to, goods on behalf of an importer or exporter of goods,
as the case may be." (Emphasis added.)
No mention is made of any obligation apart from making entry and delivering a bill of entry. The
Commissioner was aware of the customary procedures in the industry: he is an experienced
customs official himself and what the respondents claimed to be the functions of clearing agents
was brought to his attention in the correspondence before he took the decision. The fact that he
did not even mention this aspect of the matter in the reasons for his decision strengthens the
impression that he concerned himself with the respondents’ undertakings and with very little else.
[18] There is another consideration which he did not mention and must be taken to have
overlooked. The Commissioner has wide powers under ss 18(7) and 18A(6) of the Act to control
exports by prescribing whatever terms he may wish, and the Controller is entitled under s 39(1)(c)
to demand
"invoices as prescribed ... a copy of the confirmation of sale or other contract of purchase of sale,
importer’s written clearing instructions ... and such other documents relating to such goods as
[he] may require in each case"
and in addition may require the person making an entry to
"answer all such questions relating to such goods as may be put to him by the Controller ..."
But these powers were never exercised. The impression is irresistible that the insistence on the
positive verification by active enquiry of the particulars in bills of entry stemmed from the benefit
of hindsight. In the letters to the respondents the Commissioner speaks of the practice of
accepting the returned bills of entry as proof that goods had left the common customs area, as
"the time honoured practice of this office, dating back to long before I had become the incumbent
thereof". "These acquittal documents", he says, "were accepted on the same basis of trust as the
bills of entry had previously been accepted." What he did not say, is that clearing agents were in

precisely the same position and relied as heavily on the honesty of their customers as he did on
theirs. The fact of the matter is simply that for many years no-one in the industry or in the
Commissioner’s office suspected that the practice was open to abuse and that there might be a
need for additional measures. Therefore: how can it possibly be said that the respondents relied
unreasonably on the integrity of the system? Neither the Commissioner nor the Controller
foresaw that the system could fail; and if seasoned customs officials like these did not foresee it,
why should clearing agents have done so? There is no answer to these questions in the
Commissioner’s reasons, nor, for that matter in his opposing affidavit.
[19] For these reasons it is clear to me that the Commissioner did not apply his mind properly to
the question before him. Had there not been constitutional complications the appeals would have
been relatively simple because there could have been no doubt that a common law review should
succeed (cf Johannesburg Stock Exchange and Another v Witwatersrand Nigel Ltd and Another
1988(3) SA 132 (A) at 152A-D). But, as mentioned earlier, there may be a question about the
availability of common law grounds for review in view of the way in which the interim Constitution
dealt with administrative justice. Counsel were agreed that the common law on the subject was
not abolished but, because the question is important, I shall deal with it.
[20] In the Fedsure case the Constitutional Court only dealt with the interplay between the interim
Constitution and the common law relating to administrative action in the context of the jurisdiction
of the Appellate Division. As explained in paras [101] and [102] of the judgment of the plurality
every administrative action has to be consistent with s 24 of the interim Constitution, that is to say
it has to be lawful and procedurally fair. However, I agree with the view which Professors Du
Plessis and Corder expressed in Understanding South Africa’s Transitional Bill of Rights at 170
that "s 24 does not purport to constitutionalize judicial review in its fulness."
Judicial review under the Constitution and under the common law are different concepts. In the
field of administrative law constitutional review is concerned with the constitutional legality of
administrative action, the question in each case being whether it is or is not consistent with the
Constitution, and the only criterion being the Constitution itself. Judicial review under the common
law is essentially also concerned with the legality of administrative action but the question in each
case is whether the action under consideration is in accordance with the behests of the
empowering statute and the requirements of natural justice. The enquiry in this regard is not
governed by a single criterion. The grounds for review which the courts have developed over the
years can never be regarded as a numerus clausus for the simple reason that administrative law
is not static. As new notions develop and take root, so must new measures be devised to control
the exercise of administrative functions. In South Africa this is particularly true in view of the
requirement of s 35(3) of the interim Constitution that any law be interpreted, and that the
common law be applied and developed, with due regard to the spirit, purport and objects of the
Bill of Rights.
I cannot imagine that the intention was to do away with this type of review. No doubt
administrative action which is not in accordance with the behests of the empowering legislation, is
unlawful and therefore unconstitutional, and action which does not meet the requirements of
natural justice is procedurally unfair and therefore equally unconstitutional. But, although it is
difficult to conceive of a case where the question of legality cannot ultimately be reduced to a
question of constitutionality, it does not follow that the common law grounds for review have
ceased to exist. What is lawful and procedurally fair within the purview of s 24 is for the courts to
decide and I have little doubt that, to the extent that there is no inconsistency with the
Constitution, the common law grounds for review were intended to remain intact. There is no
indication in the interim Constitution of an intention to bring about a situation in which, once a
court finds that administrative action was not in accordance with the empowering legislation or the
requirements of natural justice, interference is only permissible on constitutional grounds. On the
contrary, s 35(3) is a strong indication that it was the intention, not to abolish any branch of the
common law, but to leave it to the courts to bring it into conformity with the spirit, purport and

objects of the Bill of Rights. S 33(3) which proclaims that the entrenchment of rights shall not be
construed as denying the existence of any other rights conferred by common law which are not
inconsistent with the Bill of Rights, points the same way.
[21] In the present case I have found that the Commissioner did not apply his mind properly to the
question before him. At common law such a finding provides sufficient reason to set the decision
aside and I find it unnecessary to consider whether it also falls foul of s 24 of the interim
Constitution. I also find it unnecessary to deal with the Court a quo’s judgment. Although I have
followed a different route, I am of the view that the conclusion that the decision had to be
rescinded, was correct.
[22] It is necessary to record in conclusion that we condoned the Commissioner’s failure to file the
record in terms of the Rule at the hearing of the appeal, and that we ordered him to pay the costs
occasioned by the application for condonation.
The appeals are according dismissed with costs including the costs of two counsel.
________________
HEFER JA
CONCURRED: Vivier JA
Nienaber JA
Plewman JA
Farlam AJA