THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
Case No :  622/02
Reportable
In the matter between
STANDARD GENERAL INSURANCE
COMPANY LIMITED
Appellant
and
COMMISSIONER FOR CUSTOMS
AND EXCISE
Respondent
_____________________________________________________________
Coram:
HOWIE P, NUGENT, CLOETE, LEWIS JJA, JONES AJA
Heard:
4 MARCH 2004
Delivered:
31 MARCH 2004
Summary:
Customs and Excise Act – liability of clearing agent for
payment of duty.
JUDGMENT

NUGENT & LEWIS JJA:
[1] This appeal concerns the liability of a clearing agent for the payment
of customs duty. It arises from an action that was instituted in the
Johannesburg High Court by the respondent (the Commissioner) against the
appellant (Standard General) as surety for the obligations of a clearing agent,
Gem Shipping (Pty) Ltd (Gem). Because the action took an unusual course it
is necessary to set out some of its background.
[2] The appeal is confined to one of two claims that were advanced in the
particulars of claim (claim A). The other claim (claim B) was disposed of in
separate proceedings that terminated in this court.1
[3] In the particulars of claim the Commissioner alleged that Gem became
liable to pay customs duty on certain goods pursuant to an undertaking that it
gave in a document referred to as a ‘special bond’ and pursuant to s 18A of
the Customs and Excise Act 91 of 1964, and that Gem’s failure to pay the
duty renders Standard General liable to do so. There was also a passing
reference to s 99 of the Act but that added nothing material to the
Commissioner’s causes of action.
[4] In response to the particulars of claim Standard General filed a special
plea in which it alleged that the Commissioner’s claim against Gem was ‘in

Commissioner for Customs and Excise v Standard General Insurance Co Ltd 2001 (1) SA
987 (SCA).

terms of section 99(1), (2) or (4) of the Act’ and had expired by the effluxion
of time when the summons was issued. The significance of the allegation
that the claim was ‘in terms of section 99(1), (2) or (4) of the Act’ is that the
liability that is incurred by an agent pursuant to any of those subsections
expires after two years by virtue of s 99(5) of the Act2 (as does the accessory
liability of a surety).3
[5] That allegation in the special plea was not a correct reflection of what
was said in the particulars of claim in relation to claim A. The
Commissioner did not allege that Gem’s liability was incurred pursuant to
any of the provisions of s 99 (we have mentioned that there was no more
than a passing and immaterial reference to that section) – he alleged that
Gem’s liability arose pursuant to the special bond and s 18A (and in neither
case do the provisions of s 99(5) apply). What Standard General did was to
reformulate the Commissioner’s claim – incorrectly – and thereby purport to
bring it within the terms of the time-bar in s 99(5). If an exception to the
special plea had been brought it ought to have succeeded on the pleadings
alone (whether or not the Commissioner’s claims were good in law).

Section 99(5) reads as follows: ‘Any liability in terms of subsection (1), (2) or (4)(a) shall cease after
the expiration of a period of two years from the date on which it was incurred in terms of any such
subsection.’
Commissioner for Customs and Excise v Standard General Insurance Co Ltd above.

[6] But instead the matter took another turn shortly before the trial. The
parties’ representatives agreed to place what they referred to as a ‘stated
case’ before the court for adjudication. The stated case was set out in a
document in which it was recorded that various facts were agreed upon ‘for
purposes of the special plea only’. The parties also posed three questions
(each with two subsidiary questions) for the court’s adjudication. The effect
of all this was to call upon the court to decide whether, on the facts that were
provisionally agreed, Gem (and hence the surety) became liable to the
Commissioner on any one or more of three grounds, and if so, whether that
liability had expired by the effluxion of time. Nothing was said in the
document as to the order that the court was expected to make if it answered
the various questions in one way or the other.
[7] Scant regard seems to have been given to the earlier admonition by
this court – to the same parties – that care must be taken when invoking the
provisions of rule 33 because the courts are not there to answer academic
questions.4  We might add that the ordinary procedures for the conduct of
litigation – which have generally served well over many years – should not
lightly be discarded in favour of self-devised and often ill-considered
procedures.

Commissioner for Customs and Excise v Standard General Insurance Co Ltd above 983C-E.

[8] What was placed before the court in this case, in effect, was a hybrid
of a stated case on a limited issue (the question of the time-bar) and an
exception to the particulars of claim as supplemented by facts that were
agreed upon provisionally. Courts should generally decline to decide
questions on facts that are only provisional for that will inevitably mean that
their decisions are equally provisional and might be academic. But even if
the facts in the present case had been finally agreed some of the questions
were in any event academic. (The fact that the court a quo was able to
dismiss the special plea notwithstanding that it answered one question in
favour of Standard General is ample testimony to that.) We have already
pointed out that the defence that was raised by Standard General could have
been tested and disposed of by an exception to the special plea. And if
Standard General was of the view that the Commissioner’s claims were bad
in law it could have tested them by an exception to the particulars of claim.
But if the parties truly wished to isolate issues to dispose of in accordance
with rule 33(4) they ought properly to have agreed upon the facts, or led
evidence to establish them, and called upon the court to dispose of those
issues finally in the ordinary course. The procedure that the parties devised
merely invited confusion.

[9] But because the court a quo chose to answer the questions and the
issues have now been ventilated in two courts, and because those answers
might assist in bringing this matter to finality, we intend to deal with the
questions that were posed.
The material facts that were provisionally agreed upon
[10] The following were the material facts that were provisionally agreed
upon by the parties for purposes of the ‘stated case’:
(a)
Gem was a licensed clearing agent as contemplated by s 64B of the
Act. On 22 and 26 January 1990 Gem and Standard General
respectively executed a ‘special removal bond’ in favour of the
government of South Africa (the terms of which are set out later in
this judgment).
(b)
In January 1993 Gem entered for export and removal in bond from a
customs warehouse in Durban, and transportation by road to Zambia,
goods reflected in two bills of entry. The named exporter on those
bills was an entity known as AMKA, for whom Gem was acting as
agent. Gem declared that the particulars on the bills of entry were
correct; undertook to comply with the relevant provisions of the Act;
and declared that the goods would be removed in bond to Zambia
(which is outside the common customs area). The Commissioner, by

reason of the entries made in the bills, and in terms of the provisions
of the special bond, gave permission for the goods to be transported to
Zambia without the payment of duty.
(c)
The goods were removed from a customs warehouse by Gem, which
failed to prove, within 30 days of the date of the bills, to the
satisfaction of the Commissioner, that the goods had been taken out of
the common customs area. Gem also failed to prove that the goods
were transported in accordance with the declarations made by it in the
bills.
(d)
Gem was placed in liquidation in May 1993. The first written demand
for payment of the duty on the goods was sent to Gem in December
1993, and no demand was made on AMKA. In September 1994 the
Commissioner proved a claim against the estate. The claim included
the amount that is in issue in this case.
(e)
In June 1995 the Commissioner instituted the present action against
Standard General.
The questions posed in the stated case
[11] The questions that were posed by the parties were as follows (we set
them out verbatim):
‘1.
1.1
Did Gem Shipping incur a liability in terms of section 99(2) of the Act?

1.2
If the answer to question 1.1 is in the affirmative, did such liability cease
in terms of the provisions of section 99(5) of the Act prior to 7 June 1995?
1.3
If the answer to 1.2 is in the negative, did such liability cease in terms of
the provisions of section 99(5) of the Act after 7 June 1995 and by reason
thereof extinguish the liability of the defendant?
2.
2.1
Did the principal Gem Shipping incur a separate liability in terms of the
provisions of the bond, annexure “A1” to the particulars of claim,
independently of any liability imposed by section 99(2) of the Act?
2.2
If the answer to the question in 2.1 is in the affirmative, did the provisions
of section 99(5) of the Act operate to extinguish such liability prior to 7
June 1995?
2.3
If the answer to 2.2 is in the negative, did such liability cease in terms of
the provisions of section 99(5) after 7 June 1995 and by reason thereof
extinguish the liability of the defendant?
3.
3.1
Did the principal Gem Shipping incur a separate liability in terms of the
provisions of section 18A of the Act?
3.2
If the answer to 3.1 is in the affirmative, did the provisions of
section 99(5) of the Act operate to extinguish such liability prior to 7 June
1995.
3.3
If the answer to 3.2 is in the negative, did such liability cease in terms of
the provisions of section 99(5) of the Act after 7 June 1995 and by reason
thereof extinguish the liability of the defendant?
[12] The court a quo (Malan J) answered those questions as follows and in
consequence of his findings he dismissed the special plea:

1.1
Gem did incur liability in terms of s 99(2).
1.2
Gem's liability in terms of s 99(2) expired prior to 7 June 1995 by virtue of
the provisions of s 99(5).
2.1
Gem did incur a separate liability in terms of the bond, annexure A1 to the
stated case, and independent of the liability imposed by s 99(2).
2.2
Section 99(5) did not operate to extinguish Gem's liability in terms of the
bond prior to 7 June 1995.
2.3
Gem's liability in terms of the bond did not cease in terms of s 99(5) after
7 June 1995.  The liability of the defendant under the bond was thus not
extinguished.
3.1
Gem did incur liability in terms of s 18A.
3.2
Section 99(5) did not operate to extinguish Gem's liability in terms of
s 18A prior to 7 June 1995.
3.3
Gem's liability in terms of s 18A did not cease in terms of s 99(5) after 7
June 1995. The liability of the defendant under s 18A was thus not
extinguished.
[13] In summary, the learned judge found that Gem had incurred liability
pursuant to s 99(2) for the payment of the duty, but that the liability so
incurred was extinguished by s 99(5) before the summons was issued. He
also found that Gem incurred a separate liability to pay the duty pursuant to
the special bond, and a separate liability to do so pursuant to s 18A of the
Act, and that neither of those obligations (which were secured by Standard
General) was extinguished by s 99(5).

[14] The notice of appeal – and the terms in which leave to appeal was
granted – encompassed all those answers but Standard General said in its
heads of argument that it was not appealing against the findings made on the
first question (answers 1.1 and 1.2). The Commissioner, however, asked us
to reverse answer 1.2. He submitted that the liability that was incurred by
Gem pursuant to s 99(2) of the Act (see answer 1.1) arose only when
demand for payment of duty was made upon Gem’s principal (AMKA) as
provided for in s 18A(3). That occurred not earlier than 7 December 1993
and thus, it was submitted, the liability had not expired pursuant to s 99(5)
when the summons was issued less than two years later.
[15] It is not necessary to decide whether it is competent to reverse the
finding made by the court a quo in the absence of a cross-appeal because in
our view the Commissioner’s submission is in any event not correct. We
deal more fully with s 18A later in this judgment and it is sufficient to say at
this stage that a demand by the Commissioner was not a precondition for the
principal to become liable in terms of that section. Its liability arose when
the goods were entered for export (otherwise there would be no liability
capable of ceasing as provided for in subsection (2)). Subsection (3) does no
more than create a statutory duty to meet that liability, the breach of which
constitutes an offence in terms of s 78. In our view the answer given by the

court a quo was correct and we need say no more with regard to the first
question, except that it is quite academic.
[16] Before dealing with the substance of the remaining questions there is
a matter that is common to both of them that can be disposed of at once. If
Gem incurred liability to pay the duty pursuant either to the special bond, or
pursuant to s 18A, then clearly that liability had not expired when the
summons was issued. The time-bar provided for in s 99(5) of the Act is
expressly confined to liability that is incurred by an agent in terms of that
section.5 Liability pursuant to the bond and to s 18A would be subject to the
ordinary period for prescription and it is not disputed that that period had not
elapsed when the summons was issued. Thus if answers 2.1 and 3.1 were
correct (and in our view they were correct for reasons that we will come to)
so were the respective subsidiary answers correct (answers 2.2 and 2.3, and
3.2 and 3.3).
[17] We turn then to the essential questions in this appeal (for convenience
they are dealt with in reverse order) which are whether Gem incurred
liability for the payment of duty in terms of s 18A of the Act, and whether it
incurred liability pursuant to the special bond (quite apart from any liability
that it might have incurred pursuant to s 99(2)). If it did incur liability on
either of those grounds the Commissioner’s claim has not expired and the

special plea must fail. (It will be apparent that a positive answer to either of
those questions would make the other question otiose but we deal with both
questions nevertheless.)
Liability pursuant to s 18A of the Act (question 3 in the stated case)
[18] Section 18A of the Act applies to goods that are imported into a
customs and excise warehouse and then exported from the warehouse to a
place outside the common customs area. It attaches liability for the payment
of duty upon any ‘person who exports’ the goods who is referred to in
subsequent subsections as the ‘exporter’. At the time that is relevant to this
appeal s 18A read as follows:
‘Exportation of goods from customs and excise warehouse
(1)
Notwithstanding any liability for duty incurred thereby by any person in terms of
any other provision of this Act, any person who exports any goods from a
customs and excise warehouse to any place outside the common customs area
shall, subject to the provisions of subsection (2), be liable for the duty on all
goods which he so exports.
(2)
Subject to the provisions of subsection (3), any liability for duty in terms of
subsection (1) shall cease when it is proved to the satisfaction of the
Commissioner by the exporter that the said goods have been duly taken out of the
common customs area.

The definition is set out in footnote 2.

(3)
If the exporter fails to submit any such proof as is referred to in subsection (2)
within a period of 30 days from the date on which the goods concerned were
entered for export, he shall upon demand by the Commissioner forthwith pay the
duty due on those goods.
(4)
No goods shall be exported in terms of this section until they have been entered
for export.
(5)
No such entry for export shall be tendered by or may be accepted from a person
who has not furnished such security as the Commissioner may require, and the
Commissioner may at any time require that the form, nature or amount of that
security be altered in such manner as he may determine.
(6)
. . . .’
[19] The liability for the payment of duty devolves upon any ‘person who
exports’ the goods from a customs and excise warehouse to any place
outside the common customs area. Clearly Gem was not the person who
exported the goods as that term would ordinarily be understood.  But the
Commissioner contends that the person who is referred to in subsection (1)
(a ‘person who exports’) is an ‘exporter’ as that word is defined in the Act,
which includes any person who acts on behalf of an exporter,6 and that
includes Gem (who was acting on behalf of AMKA).

Section 1 defines an ‘exporter’ to include ‘any person who, at the time of exportation – (a) owns any
goods exported; (b) carries the risk of any goods exported; (c) represents that or acts as if he is the exporter
or owner of any goods exported; (d) actually takes or attempts to take any goods from the Republic; (e) is
beneficially interested in any way whatever in any goods exported; (f) acts on behalf of any person referred
to in paragraph (a), (b), (c), (d) or (e), and, in relation to imported goods, includes the manufacturer,
supplier or shipper of such goods or any person inside or outside the Republic representing or acting on
behalf of such manufacturer, supplier or shipper’.

[20] It was submitted on behalf of Standard General, on the other hand,
that subsection (1) is confined to a ‘person who exports’ goods within the
ordinary meaning of those words, and that the references to the ‘exporter’ in
subsections (2), (3) and (10) are references to that person, and not to an
‘exporter’ as defined. The subsection (and the remaining subsections by
extension) is confined, so it was argued, to the person who exports the goods
as ordinarily understood: the person who ‘transport[s] (merchandise) from
one country to another in the course of trade’ (per Nienaber JA in De Beers
Marine (Pty) Ltd v Commissioner, South African Revenue Service 2002 (5)
SA 136 (SCA) para 5. In other words, argues Standard General, although the
noun (‘exporter’) is defined, the definition does not extend to the use of the
verb.
[21] In support of that contention it was submitted that if the drafter of the
legislation had intended to refer to an ‘exporter’ as it is defined in the Act
that word would have been used in place of the phrase ‘person who exports’.
Moreover, it was pointed out that when defining the noun the drafter of the
legislature did not expressly extend its meaning to the use of the verb, as is
often done in legislation. For example, when the definition of the word

‘manufacture’ was later inserted in the Act it expressly provided that the
noun would bear a corresponding meaning.7
[22] In our view some caution is required before attributing an intention to
the drafter of legislation by inference. Giving meaning to particular words
by drawing upon language that is used elsewhere in a statute is no more than
the application of a process of logical reasoning – it is usually reasonable to
infer that the compiler of a single document has used language consistently
throughout.8 But where a voluminous and complex statute has been
repeatedly amended, probably by various drafters, over a long period of time
– as in this case – that inference will not necessarily be sound.
[23] In our view the drafter of s 18A (which was inserted when the
definition of ‘exporter’ already existed)9 might just as well have held the
view that because a ‘person who exports’ is the linguistic equivalent of an
‘exporter’ the former phrase would suffice. Naturally the noun might have
been used instead but we do not think that a contrary intention was
necessarily signified by the choice of words that have an equivalent
meaning.

That definition was inserted by s 1 of the Customs and Excise Amendment Act 84 of 1987.
Marine Construction and Design Co, supra, 189H-190A.
Section 18A was inserted by s 5 of the Customs and Excise Amendment Act 84 of 1987.  The
definition of an ‘exporter’ in its present form was inserted by the Second Customs and Excise Amendment
Act 112 of 1977.

[24] We also think it would be remarkable – simply from a consideration
of the intelligibility of language10 – if the drafter of the definition of the noun
were to have intended the verb to be used with a different connotation. It is
true that when a noun is defined in legislation the drafter often expressly
attributes a corresponding meaning to the verb – and vice versa – but that
begs the question whether it is strictly necessary to do so. There are clear
examples of tautology in the Act, just as there are examples of particular
words being used when others might have sufficed.
[25] Rather than attempting to draw inferences as to the drafter’s intention
from an uncertain premise we have found greater assistance in reaching our
conclusion from considering the extent to which the meaning that is given to
the words achieves or defeats the apparent scope and purpose of the
legislation.11 As pointed out by Nienaber JA in De Beers Marine, above,
para 7, when dealing with the meaning of ‘export’ for the purpose of s 20(4)
– which draws a distinction between export and home consumption – the

Per Botha JA in Marine Construction and Design Co v Hansen’s Marine Equipment (Pty) Ltd 1972
(2) SA 181 (A) at 189H.
Per Schreiner JA in Jaga v Donges, NO and Another: Bhana v Donges, NO and Another 1950 (4)
SA 653 (A) 662G-H:
‘Certainly no less important than the oft repeated statement that the words and expressions used in
a statute must be interpreted according to their ordinary meaning is the statement that they must be
interpreted in the light of their context.  But it may be useful to stress two points in relation to the
application of this principle.  The first is that “the context”, as here used, is not limited to the
language of the rest of the statute regarded as throwing light of a dictionary kind on the part to be
interpreted.  Often of more importance is the matter of the statute, its apparent scope and purpose,
and, within limits, its background . . .’.

word must ‘take its colour, like a chameleon, from its setting and surrounds
in the Act’.
[26] While the word ‘exporter’ as it is used in subsections (2) and (3) is
clearly a reference to the ‘person who exports’ in subsection (1), in our view
the person who is referred to in subsection (1) is, by equivalence of
language, an exporter, and that word is in turn defined. That construction
seems to fit more readily with the apparent purpose and operation of the Act
than a construction that gives a narrow meaning to the phrase.
[27] The object of the Act (in so far as it relates to import duty) is to ensure
that duty is collected on goods that are imported into this country and its
provisions are mainly directed towards that end. It is not surprising that
liability for the payment of duty should be imposed upon more than one
person, or upon one person in more than one capacity, for the Commissioner
cannot be expected to know who has what interest in goods that are landed.
[28] There are various provisions in the Act in which liability for the
payment of duty is imposed at different times on a variety of people who
might have some interest in the goods and s 44(6)(c) provides an appropriate
example. When goods are imported and delivered by a carrier to a customs
warehouse duty becomes payable by, amongst others, the ‘importer’ of the

goods,12 defined to include a person who owns the goods, a person who
carries the risk in the goods, a person who represents that or acts as if he is
the importer or owner of the goods, a person who actually brings the goods
into the Republic, a person who is beneficially interested in the goods, and a
person who acts on behalf of any of the aforementioned persons. Just as
different people might become liable for the payment of duty so one person
might incur liability in different capacities. Furthermore the agent of any
such person might become liable not only because he is an importer as
defined but also by virtue of the liability imposed on agents generally by
s 99(2). Duplication of payment is avoided by s 44A which absolves each of
the various persons from liability upon payment of the duty by one of them.
[29] Where the net has been cast that widely upon the importation of goods
(to include all those who might have an interest in the import) we would
expect the net to be cast equally widely (to include all those who might have
some interest in the export) when the goods are removed for export before
the duty has been paid, rather than that liability would be limited to only a
single person – and possibly his agent. For an agent becomes liable in terms
of s 99(2)13 only if he is the agent, or represents himself to be the agent, of a
principal who is himself liable for the payment of duty. It cannot be assumed

Cf EBN Trading (Pty) Ltd v Commissioner of Customs and Excise [2001] 3 All SA 117 (SCA) para
28.

that a clearing agent will necessarily be appointed by, or represent himself to
have been appointed by, the person who is in truth the exporter as narrowly
defined (the person who actually exports the goods, whoever that person
might be). It can also not be assumed that only one person will undertake the
process of exporting from beginning to end. It is unlikely that the legislature
would have intended that goods should be permitted to leave the warehouse
for export (with the inherent potential that the goods might never leave the
common customs area) but that the liability for duty would devolve only
upon one undefined person. We do not think the legislature could have
intended the Commissioner to seek out the true exporter in order to collect
the duty from that person, and perhaps from his agent (but only if the agent
has been appointed by, or has represented that he has been appointed by, that
person).
[30] In our view the legislature must have intended liability to fall upon all
the persons who might have an interest in the export (those defined in the
definition of an ‘exporter’) just as it imposed liability on all those who have
an interest in the import and that a ‘person who exports’ was intended to
bear that meaning.
[31] That construction does not give rise to anomalies, as suggested by
counsel for Standard General. At first sight it might appear to be unusual

Read with ss 64B(5) and (6).

that Gem should incur liability under more than one section of the Act, and
that the liability that it might incur under each of them expires after the
effluxion of different periods of time. But we have already drawn attention
to the fact that cumulative liability is not an uncommon feature of the Act,
and the fact that the liability incurred as an agent expires after a shorter time
does not seem to us to take the matter further. It would be more anomalous if
the word ‘exporter’ as used in s 99(2) of the Act had one meaning for some
purposes and another meaning for other purposes, which would necessarily
follow from construing s 18A narrowly.
[32] Thus in our view s 18A renders Gem, as the agent for AMKA, liable
to pay the duty if it is not proved to the satisfaction of the Commissioner that
the goods were taken out of the common customs area. That it has failed to
do so is not in dispute for present purposes, and Standard General is liable as
surety for that debt. In our view the answer given by the court a quo to
question 3.1 was correct. (We have already said that in those circumstances
the subsidiary answers would also be correct).
Liability pursuant to the Special Bond (question 2 in the stated case)
[33] The Commissioner also contends that Gem undertook liability for the
payment of the duty pursuant to the provisions of the bond – quite

independently of any liability that it might otherwise have incurred in terms
of the Act – and that Standard General has an accessory obligation.
[34] The special bond reflects language from a bygone era and reads as
follows:
‘DEPARTMENT OF FINANCE
CUSTOMS AND EXCISE SPECIAL REMOVAL BOND No.
KNOW ALL MEN BY THESE PRESENTS that we GEM SHIPPING (PTY) LTD
through our duly authorized Agent and Attorney in that behalf . . . , as Principal, and the
Standard General Insurance Company Ltd through our duly authorized Agent and
Attorney in that behalf . . . , as Sureties in solidum and co-principal debtors renouncing
and waiving the exceptions ordinis seu excussionis et divisionis,  . . .  are held and firmly
bound unto the Government of the Republic of South Africa in the sum of R700 000 . . .
of good and lawful money to be paid to the said Government to which payment well and
truly to be made we bind ourselves jointly and severally each for the whole, our heirs,
Executors, Administrators and Assigns.
WHEREAS the above Principal is desirous of removing from Durban Harbour area
and/or SA CONTAINER DEPOTS, DURBAN, by road transport, goods, wares or
merchandise to destinations outside the Republic of South Africa subject to the rules and
regulations of the Laws of the Republic of South Africa relating to Customs and Excise,
without payment of Duty.
NOW THE CONDITIONS AND OBLIGATIONS ARE SUCH THAT if all goods as
shall be entered and suffered to be removed from the DURBAN HARBOUR AREAS
and/or SA CONTAINER DEPOTS, DURBAN, to any place outside the Republic of

South Africa shall be duly removed in accordance with the regulations in that behalf and
shall be transported in accordance with the declaration of destination made by the above
Principal from time to time.
AND FURTHER, if all goods in bond and every part thereof entered and suffered and
delivered to be removed in bond to any place outside the Republic be conveyed in
accordance with the regulations in that behalf and be removed from the Republic without
alteration or diminution of the contents within the space of thirty days from the date of
entry into the Republic or the full and lawful duty thereon be paid to the government of
the Republic of South Africa;
THEN THIS OBLIGATION TO BE VOID, OTHERWISE TO REMAIN IN FULL
FORCE AND EFFECT.’
[35] The document was signed on behalf of Standard General, which was
described as ‘surety’, and on behalf of Gem, which was described as
‘principal’.
[36] The meaning that the Commissioner ascribes to the bond is that it
imposes a principal obligation on Gem which is independent of the
provisions of the Act, thereby serving to guarantee payment of duty by the
person for whom Gem acts when it clears the goods (in this case AMKA).
[37] On behalf of Standard General, on the other hand, it was submitted
that Gem incurred no liability other than in terms of the Act, and that the
bond serves merely to acknowledge the existence of that liability and to

secure that liability as contemplated by s 64B of the Act,14 in much the same
way as did the bond that was in issue in Commissioner of Customs v C&S
Trading Co 1939 AD 519. In that case a bond was given by an importer in
terms of the regulations made under the Customs Tariff and Excise Duties
Amendment Act 36 of 1925, which permitted him to import goods free of
duty on certain conditions, provided that he entered into a bond on the terms
specified in the regulations. It was held that the bond that was executed by
the importer did not itself give rise to an obligation but merely
acknowledged the existence of an obligation that devolved upon the
importer pursuant to the regulations. But as pointed out by Lord Steyn,15 ‘In
law context is everything.’ Clearly the bond in that case was construed in the
context of the regulation pursuant to which it was given. As De Wet JA said
at 527-8:
‘This conclusion can also be reached by another line of reasoning. When the
regulation makes it imperative that the applicant shall acknowledge in a written document
(i.e. the bond) that he shall pay all the duty on a consignment if he misuses some of the
goods, the latter obligation is by clearest implication laid down by the regulation, and the
regulation must be read in the same way as if it provided that the applicant shall be bound
to pay all the duty if he misuses some of the goods and shall further be bound to

Section 64B(3) provides that before any person is licensed as a clearing agent he must ‘furnish such
security as the Commissioner may require’.
R v Secretary of State for the Home Department, ex parte Daly [2001] 3 All ER 433 (HL) at 447a.

acknowledge this liability in a written document and to get a surety to guarantee its
performance.’
It was not suggested that there is any like consideration that
determines the construction to be placed on the bond in the present case, nor
is there anything in the statute to show that a bond that is required to be
given by a clearing agent in terms of s 64B will be confined to liability that
is incurred in terms of the Act, and we see no reason why the bond should
not be given its ordinary meaning.
[38] When a person appends his signature to a document that is intended to
create legal obligations the first rule in identifying those obligations is to
give effect to his intention as it has been expressed in the document. The
language of the document in the present case – though archaic – is to our
minds quite clear. In summary, Gem expressly bound itself, upon signature
of the document, to pay to the government the sum of R700 000, but it was
released from that obligation for so long as goods that it caused to be
removed from the harbour or the container depots at Durban, or that it
caused to be removed in bond, were duly transported to their proper
destination or duty was paid on the goods by someone.
[39] It is characteristic of the Act for liability to be created upon the
happening of an event and then to expire upon the happening of another and
the bond is in a comparable form. We see nothing in the language of the

bond – whether expressly or by implication – that limits Gem’s liability to
that which it might incur in terms of s 99(2) or in terms of any other section
of the Act. Nor do we see anything to suggest that its obligation is in some
way accessory to some other obligation. While Gem’s obligation to pay is
dependent upon the existence of a particular state of affairs (the absence of
the goods at their proper destination and the absence of payment by someone
– a state of affairs that exists in the present case) that is a principal obligation
that arises when the state of affairs exists and is enforceable as such.
[40] We have already observed that the Act expressly contemplates
cumulative liability in pursuance of its objective of ensuring that import duty
is paid, and we do not find it surprising that the Commissioner should have
chosen to add yet another basis for liability independently of the Act. The
clearing agent, after all, is best placed to ensure that the duty is paid – and
there is every reason why the Commissioner should seek to hold him liable
on any number of grounds. In our view question 2.1 and its subsidiary
questions were also correctly answered.
[41] The appeal is dismissed with costs including those occasioned by the
employment of two counsel.
________________
NUGENT JA

________________
LEWIS JA
HOWIE P)
CLOETE JA)
CONCUR
JONES AJA)