Commissioner for Custome & Excise v Standard General Insurance Company Ltd. (507/98) [2000] ZASCA 55; 2001 (1) SA 978 (SCA) (29 September 2000)

Commissioner for Custome & Excise v Standard General Insurance Company Ltd. (507/98) [2000] ZASCA 55; 2001 (1) SA 978 (SCA) (29 September 2000)

Section 99(5) of the Customs and Excise Act 91 of 1964 creates a limitation or expiry period, not a prescription period. The wording 'liability shall cease' is inconsistent with the provisions of the Prescription Act, which allow for suspension or interruption of prescription. The legislature's deliberate choice of language in section 99(5), contrasted with other sections of the Customs Act that refer to prescription, confirms this interpretation. Consequently, after the lapse of two years from the date the liability was incurred, both the principal and accessory obligations are extinguished, and no claim can be maintained against the surety. The filing of a claim against the insolvent...

Citation
[2000] ZASCA 55
Parties
Appellant: Commissioner for Customs & Excise; Respondent: Standard General Insurance Company Limited
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
29 September 2000
Case Number
507/98
Procedural Posture
Civil Appeal / Appeal From Judgment of Court a Quo; Main Appeal and Cross Appeal
Outcome
Appeal in respect of the claim for R50 000 fails; cross-appeal in respect of the claim for R10 000 is upheld. Both claims by the Commissioner are dismissed with costs.
Judges
F H Grosskopf, Howie, Plewman, Farlam, Mpati
Legal Topics
Customs and Excise Act, Suretyship Liability, Limitation Periods, Prescription Act, Accessory Obligation
Commercial and Corporate Civil Procedure Customs and Excise Act Suretyship Liability Limitation Periods Prescription Act Accessory Obligation

Case Brief

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Parties

Commissioner for Customs & Excise

Appellant

Standard General Insurance Company Limited

Respondent

Procedural Posture

Civil Appeal / Appeal From Judgment of Court a Quo; Main Appeal and Cross Appeal

Legal Issues

  1. 1 Whether section 99(5) of the Customs and Excise Act 91 of 1964 constitutes a limitation period or a prescription period.
  2. 2 Whether the running of prescription was interrupted by the Commissioner filing a claim against the estate of the principal debtor under section 13(1)(g) of the Prescription Act 68 of 1969.
  3. 3 Whether the liability of the surety (Standard General) ceased upon the expiry of the two-year period stipulated in section 99(5).

Ratio Decidendi

Section 99(5) of the Customs and Excise Act 91 of 1964 creates a limitation or expiry period, not a prescription period. The wording 'liability shall cease' is inconsistent with the provisions of the Prescription Act, which allow for suspension or interruption of prescription. The legislature's deliberate choice of language in section 99(5), contrasted with other sections of the Customs Act that refer to prescription, confirms this interpretation. Consequently, after the lapse of two years from the date the liability was incurred, both the principal and accessory obligations are extinguished, and no claim can be maintained against the surety. The filing of a claim against the insolvent...

Court Disposition

Appeal in respect of the claim for R50 000 fails; cross-appeal in respect of the claim for R10 000 is upheld. Both claims by the Commissioner are dismissed with costs.

Orders

  • The appeal in respect of the claim for R50 000 fails and the cross-appeal in respect of the claim for R10 000 is upheld.
  • Paragraphs 3, 4 and 5 of the court below’s order are set aside and substituted with an order that the plaintiff’s claims are dismissed with costs.