Cornerstone Logistics (Pty) Ltd and Another v Zacpak Cape Town Depot (Pty) Ltd

Zacpak Cape Town Depot (Pty) Ltd is the licensed operator of a customs and excise warehouse under the Customs and Excise Act 91 of 1964. Cornerstone Logistics (Pty) Ltd, acting as clearing agent for the owner of goods, applied for and was granted credit facilities by Zacpak for warehousing services. Mr Preston Cheslin Aitken signed the credit application both on behalf of Cornerstone and as surety and co-principal debtor. Cornerstone stored consignments of alcohol in Zacpak’s bonded warehouse and, through emails sent by its representative, instructed Zacpak to release the goods to a transporter (Bridge Shipping) for export to Mozambique. The goods were never exported and were impermissibly diverted for home consumption in South Africa. SARS demanded payment from Zacpak of over R37 million in customs duty, VAT and penalties, alleging that export documentation had been forged or fraudulently obtained. Zacpak sought to enforce contractual indemnity and suretyship clauses against Cornerstone and Mr Aitken to recover any amounts it was required to pay SARS.

The appeal was dismissed with costs, including the costs of senior counsel. The order of the High Court holding Cornerstone and Mr Aitken jointly and severally liable to indemnify Zacpak for any amounts it is required to pay SARS was confirmed.

The case is significant for clarifying the scope and enforcement of indemnity clauses in warehousing and logistics contracts under South African law, particularly in the context of the Customs and Excise Act. It confirms that broadly worded indemnities can extend to substantial statutory liabilities where the licensee acts on a client’s instructions and is not at fault. The judgment also reinforces principles governing the interpretation of suretyships and confirms the accessory nature of a surety’s liability.