Commissioner for the South African Revenue Service and Another v TFN Diamond Cutting Works (Pty) Ltd

TFN Diamond Cutting Works (Pty) Ltd exported a consignment of diamonds to New York after inspection and sealing by the South African Diamond Board. Upon return to South Africa, the remaining diamonds were declared at Johannesburg International Airport but detained by employees of the South African Revenue Service due to incomplete documentation. The diamonds were sealed and placed in a safe in a customs strongroom, under the control of a SARS employee, Joseph Matshiva. When proper documentation was later presented, the diamonds were found to be missing. Evidence established that the diamonds had been stolen during Matshiva’s shift while he had control of the safe. The plaintiff sued SARS and the Minister of Finance for the loss.

The appeal was dismissed with costs, and the appellants remained jointly and severally liable for the respondent’s loss.

The case affirms and clarifies the principles of vicarious liability in South African law, confirming that employers may be held liable for intentional wrongdoing by employees committed within the course and scope of their duties. It also limits the scope of statutory immunity under the Customs and Excise Act, reinforcing strict interpretation of exemption clauses and the accountability of state authorities for losses caused by their officials.