South African Reserve Bank and Another v Johnine Winsome Elisie Maddocks N O and Another

The South African Reserve Bank (SARB), acting under the Exchange Control Regulations issued in terms of the Currency and Exchanges Act 9 of 1933, issued blocking orders in September 2015 over bank accounts of two companies, Sun Candle Products (Pty) Ltd and Xinming Mountain Textile (Pty) Ltd, on suspicion of exchange control contraventions. The companies were provisionally and finally wound up in February and March 2017. After liquidation, SARB issued forfeiture orders under Regulation 22B, declaring the blocked funds forfeited to the State and payable into the National Revenue Fund. The liquidators demanded payment of these monies to the insolvent estates, contending that upon liquidation the funds vested in them and that forfeiture after concursus creditorum was unlawful. The High Court upheld the liquidators’ case and set aside the forfeiture orders. SARB and National Treasury appealed to the Supreme Court of Appeal.

The appeal succeeded. The order of the High Court was set aside and replaced with an order dismissing the liquidators’ application with costs.

This case clarifies the relationship between exchange control enforcement and insolvency law in South Africa. It confirms that blocking and forfeiture orders under the Exchange Control Regulations survive liquidation and are not nullified by concursus creditorum. The judgment affirms the supremacy of exchange control measures as public-law sanctions aimed at protecting the national economy and currency, and limits the reach of insolvency law in this context.