The Commissioner of Customs and Excise v Container Logistics (Pty) Limited and The Commissioner of Customs and Excise v Rennies Group Limited trading as Renfreight

Two clearing agents (Container Logistics (Pty) Limited and Rennies Group Limited trading as Renfreight) were held liable by the Commissioner of Customs and Excise for unpaid customs duties relating to goods cleared in Durban for export to Mozambique during 1992. The goods had been cleared by the respondents acting as agents for smaller clearing agents (Access Freight and Anglo Dynamic). An investigation revealed massive fraud - goods that were supposedly exported never left the common customs area, and bills of entry had counterfeit stamps and signatures. In 41 cases Conlog had acted as clearing agent, and in 2 cases Renfreight. The Commissioner initially demanded payment from the respondents as principals, but later accepted they may have been agents and applied section 99(2)(a) of the Customs and Excise Act 91 of 1964. The Commissioner decided the respondents had not taken 'all reasonable steps' to prevent the non-fulfilment of their principals' obligations and were therefore liable. The respondents successfully reviewed these decisions in the Transvaal Provincial Division in October 1995. The Commissioner appealed in March 1996.

• Whether the Supreme Court of Appeal has jurisdiction to hear appeals involving constitutional issues under the interim Constitution in light of Item 17 of Schedule 6 to the Constitution Act 108 of 1996
• Whether common law grounds for judicial review of administrative action still exist after the enactment of section 24 of the interim Constitution (Act 200 of 1993)
• Whether the Commissioner properly applied his mind to the question whether the respondent clearing agents had taken 'all reasonable steps' to prevent non-fulfilment of obligations under section 99(2)(a)(iii) of the Customs and Excise Act 91 of 1964
• What standard of reasonableness applies to clearing agents under section 99(2)(a)(iii) of the Customs and Excise Act

Both appeals dismissed with costs including costs of two counsel. The Commissioner's condonation application for failure to file the record was granted, with costs of that application payable by the Commissioner.

1. Under Item 17 of Schedule 6 to the Constitution Act 108 of 1996, pending proceedings must be disposed of as if the new Constitution had not been enacted unless the interests of justice require otherwise, which determination is made ad hoc based on the particular circumstances. 2. The lawfulness or unlawfulness of administrative conduct is determined by the applicable law at the time it took place. 3. Common law grounds for judicial review of administrative action continue to exist alongside constitutional review under section 24 of the interim Constitution. Constitutional review concerns constitutional legality while common law review concerns whether action accords with the empowering statute and natural justice. The common law grounds are not a closed list and continue to develop consistently with section 35(3) of the interim Constitution. 4. Under section 99(2)(a)(iii) of the Customs and Excise Act 91 of 1964, the question is whether an agent has taken all reasonable steps to prevent the non-fulfilment of the particular obligation which the principal has not fulfilled in the specific case. 5. Reasonableness under section 99(2)(a)(iii) must be determined by an objective standard having regard to the customary functions and practices of the relevant industry.

Hefer JA expressed respectful agreement with the Constitutional Court's view in Fedsure that in respect of constitutional issues under the interim Constitution it would be in the interests of justice for the Supreme Court of Appeal to exercise jurisdiction under Chapter 8 of the 1996 Constitution, but noted this was obiter and not a binding direction. The Court did not decide whether sections 18 and 18A of the Customs and Excise Act create a positive legal obligation on an exporter or remover to take goods out of the common customs area, finding it unnecessary on the facts. The Court noted that it is difficult to conceive of a case where a question of administrative legality cannot ultimately be reduced to a question of constitutionality, but this does not mean common law grounds cease to exist. The judgment contains observations about the relationship between the Commissioner and clearing agents being based on trust, and notes the Commissioner has wide powers under sections 18(7), 18A(6) and 39(1)(c) to control exports and require documentation, but these powers were never exercised in this case.

This case is significant in South African administrative law for establishing that common law grounds for judicial review continue to exist alongside constitutional review under section 24 of the interim Constitution (and by extension under the final Constitution). The judgment clarifies that constitutional review and common law review serve different but complementary functions, with common law review providing a more nuanced framework that continues to develop. The case also provides important guidance on the application of the 'interests of justice' test under Item 17 of Schedule 6 for pending cases, and establishes the principle that the lawfulness of administrative conduct must be determined by the law in force at the time of the conduct. In the customs and excise context, it establishes that the reasonableness standard under section 99(2)(a)(iii) must be assessed objectively by reference to industry customs and practices, and that administrators must properly apply their minds to the actual legal question before them rather than focusing on collateral undertakings.