Cape Times: 13 January 2005
Van der Merwe's court bid for return of R1.52m forex fails
By Fatima Schroeder
The Cape High Court has dismissed an application by well-known businessman Gary van der Merwe for the return of R1.52 million in foreign currency seized from him at Cape Town International Airport in July last year.
The money was in euros and US dollars.
During the court proceedings, however, Van der Merwe's counsel abandoned the claim for the return of the dollars and proceeded with that for the Û130 000 (about R1.02m).
Van der Merwe claimed in court papers that he had planned to take his family and friends on an extended holiday in the Mediterranean.
They had left before him so he could attend to his business and his flight for Las Palmas, through London, had been scheduled for July 13 last year.
He had completed a declaration under the Customs and Excise Act giving the amount in foreign currency that he was taking with him.
But, after an inspection of his luggage, a police official seized currency. The money was counted and placed in a sealed bag.
Van der Merwe was arrested and released on bail the following day.
He turned to the high court in an attempt to recover
the money and alleged that it was being held without just cause.
He also claimed that he needed the money because the vessel that his family had boarded as part of their trip was stranded in Las Palmas because of a lack of funds.
The money had been seized at the airport on the grounds that Van der Merwe had contravened the exchange control regulations by allegedly making a fraudulent declaration.
The regulations say that any money seized should be forfeited automatically to the National Revenue Fund unless the Treasury directs that it be returned to the person from whom it has been seized.
Days after the money was seized, the commissioner of SA Revenue Services (SARS) issued a notice under a section of the Income Tax Act claiming that the money should be forwarded to SARS because Van der Merwe or his company, the Wellness International Network, owed it money.
In a judgment handed down yesterday, Justice Rosheni Allie agreed with Van der Merwe's legal team that the state had failed to prove that the businessman owed money to SARS.
"In my opinion, the (commissioner) was not entitled to receive the funds for two reasons," she said.
"First, because (SARS) had not shown that any tax, interest or penalty was due. Second, because the funds were not held on behalf of (Van der Merwe) at the time and were in fact forfeited to the National Revenue Fund."
Judge Allie found that the money had been forfeited to the National Revenue Fund and that this had been done legitimately. It should be held in terms of the provision on forfeiture, she said.
She dismissed the application with costs, but warned: "The respondents would do well to heed the finding that (the commissioner) was not entitled to hold the funds.. and to correct their administrative bungling."
Van der Merwe's counsel, Brian Pincus, SC, told the Cape Times yesterday his client was considering his position and might seek leave to appeal against the judgment.
Edited to correct date