SOUTH AFRICA: Detaining counterfeit goods: Finding time to do the job
LA Group applied for leave
to appeal. In response, USPA applied to the court a quo in terms of
section 18 of the Superior Courts Act for leave to execute the court a quo's
decision. Section 18(1) of said Act provides that an appeal will suspend
a decision - but the court may order otherwise. LA Group's application
for leave to appeal was refused, and USPA's application for leave to execute
the court a quo's decision was granted. In these circumstances, section
18(4)(ii) of said Act creates an automatic right of (expedited) appeal to the
next highest court. On appeal to it, a full bench (the first full bench -
FFB) set aside the decision granting leave to execute the court a quo's
decision.
That left unresolved the
merits of the court a quo's decision, hence necessitating a second full bench
(SFB) appeal, being the case under discussion here. The latter court
indicated that at the heart of the appeal was the legal question whether it was
competent for the court a quo to order the release of the imported goods in
circumstances where the goods had been detained under the Customs and Excise
Act. The same question that confronted the FFB.
The Customs and Excise Act
authorises the police to detain goods for the purpose of establishing whether
the goods are liable to forfeiture thereunder. LA Group argued that the
application in the court a quo was premature because a party is only entitled
to demand the release of goods which have been seized. The distinction
between goods that have been detained and those that have been seized was said
to determine the scope and nature of the relief that may be claimed by a person
seeking their return. USPA on the other hand submitted that the police
inspected the container carrying the imported goods and that, consequently, at
the time that the application was brought the official had finished her
investigation. With the conclusion of the investigation, the continued
detention was no longer justified and the imported goods had to be released. USPA also referred to the decision in Commissioner
for the South African Revenue Service v Trend Finance (Pty) Ltd, which
stated that in terms of detention, a limitation must be read in that the right
to detain goods only endures for a reasonable period of time. The SFB however held (paragraph 25) that USPA
did not establish that a reasonable period of time had passed.
The SFB further stated
that there was nothing on the papers to indicate that when the application was
launched that the police had completed an investigation into whether there were
reasonable grounds to suspect that an offence in terms of the Counterfeit Goods
Act was committed.
The SFB then had regard to
the following passage (paragraph 30) of the ruling of the FFB:
"A distinction (which
was overlooked by the court a quo) must therefore be drawn between the 'detention'
and the 'seizure' of goods. Goods may only be 'seized' after
the inspector has investigated the matter and has exercised a discretion
that she reasonably suspects that the detained goods may be counterfeit
and only after she has applied for a warrant in order to 'seize' the goods in
terms of the Counterfeit Goods Act.”
The SFB thus held that the
application was prematurely launched and that the court a quo usurped the
discretion of the officials in terms of the Customs and Excise Act. It
was accordingly not competent for the court a quo to have ordered the release
of the imported goods.
The case establishes that
a party is only entitled to demand the release of goods that have been
"seized". It also indicates that the courts will provide the
relevant officials with sufficient time to determine the status of possible
counterfeit goods. However, the time
period must be reasonable.
Prof Wim Alberts (University
of Johannesburg)
