Saleh v South African Reserve Bank and Another

The Plaintiff received a Forfeiture Notice from the First Defendant (SARB) dated 3 August 2022, in terms of Exchange Control Regulation 22B, forfeiting funds of R1 011 862.59 and R77 431.92 held in two bank accounts to the State. The Plaintiff instituted action against the Defendants, alleging the decision was wrongful, unlawful, and violated his proprietary rights. The Plaintiff contended that the alleged contravention of Exchange Control Regulations was committed by Jamal and Brothers CC, a separate juristic entity, and not by himself personally. The First Defendant raised an exception against the Plaintiff's Particulars of Claim on the ground that it lacked the necessary averments to sustain a cause of action. The exception was based on the failure to properly plead the requirements of the Exchange Control Regulations, particularly regarding the taint of the funds and the applicability of the Regulations to the Plaintiff as the possessor of the funds.

• Whether the Notice of Exception complied with Uniform Rule 23(3) by clearly and concisely stating the grounds upon which the exception is founded.
• Whether the Plaintiff's Particulars of Claim disclosed a cause of action under Exchange Control Regulation 22D(b) read with Regulation 22B and Section 9(2) of the Currency and Exchanges Act, 1933.
• Whether the alternative claim of unjust enrichment was properly pleaded and sustainable in light of the principle of subsidiarity.
• Whether the court could consider grounds of vagueness and embarrassment not specifically pleaded in the Notice of Exception.

The exception is upheld with costs. The court ordered costs on the ordinary scale, refusing the First Defendant's request for attorney and client costs.

A plaintiff challenging a forfeiture under Exchange Control Regulation 22D(b) must plead material facts that demonstrate compliance with the peremptory provisions of the entire Exchange Control legislative framework, including averments that the funds were acquired bona fide for reasonable consideration where relevant. A bare reference to a single regulation without pleading facts that engage the interrelated provisions is insufficient to disclose a cause of action.

The court observed that the principle of subsidiarity—that where legislation provides a remedy, a litigant cannot circumvent it to rely on a common law remedy—may be a matter for consideration at trial regarding the alternative common law claim of unjust enrichment. The court also noted that a dismissal of the action would be premature as there appeared to be issues requiring ventilation at trial, and the door had not been shut on other legal remedies to address pleading deficiencies.

The case clarifies the pleading requirements for an action to set aside a forfeiture under Exchange Control Regulation 22D(b). It emphasises that a plaintiff must plead material facts aligning with the whole regulatory framework (Regulations 22A, 22B, 22C, and 22D) and not merely a single regulation in isolation. It underscores the principle that an exception tests whether the pleaded facts, accepted as true, can sustain a cause of action on any possible interpretation, and that minority blemishes may be cured by further particulars, but a failure to plead peremptory statutory requirements renders the pleading excipiable.