The South African Reserve Bank v Mzilikazi Godfrey Khumalo and Another

The South African Reserve Bank (SARB), acting as the Treasury for purposes of the Currency and Exchanges Act 9 of 1933, investigated transactions involving Mr Khumalo and Mawenzi Resources and Finance Company (Pty) Ltd from 2002, suspecting contraventions of the Exchange Control Regulations. In August 2008 SARB issued a notice of attachment under regulation 22C(1) attaching various untainted assets of the respondents. The respondents approached the North Gauteng High Court for urgent relief, contending that regulation 22C(1) was invalid because it failed to prescribe a maximum duration for attachments, allegedly contrary to section 9(2)(g) of the Act. The High Court upheld this argument, declared the regulation invalid, and set aside the attachment. SARB appealed to the Supreme Court of Appeal.

The appeal was upheld with costs, including the costs of two counsel. The order of the North Gauteng High Court was set aside and replaced with an order dismissing the respondents’ application with costs.

The case clarifies the relationship between empowering statutes and subordinate legislation in South African law, confirming that statutory limits apply even if not expressly repeated in regulations. It affirms the validity of regulation 22C(1) and strengthens the Reserve Bank’s exchange control enforcement powers, while reinforcing principles of statutory interpretation and legality.