Patrick Lorenz Martin Gaertner and Others v The Minister of Finance and Others

Case No. Lower Court Judgments Hearing Date Judgment Date Majority Author  Vote
CCT 56/13 Western Cape High Court, 8 Apr. 2013 12 Sep. 2013
14 Nov. 2013 Madlanga J. Unanimous

This case involves a challenge to the sections of the Customs and Excise Act 91 of 1964 (“the Customs Act“) which empowers South African Revenue Service (“SARS“) officials to conduct certain searches without the need for a warrant.  

The Constitutional Court, a judgment authored by Madlanga J, in which the Mogoeng CJ, Moseneke DCJ, Cameron J, Froneman J, Jafta J, Mhlantla AJ, Nkabinde J, Skweyiya J, Van der Westhuizen J and Zondo J concurred, found the provisions in question to be overbroad in that SARS officials were “given far-reaching powers (breaking in and breaking floors) that may be exercised anywhere, at whatever time and in relation to whomsoever, with no need for the existence of a reasonable suspicion, irrespective of the type of search”. This constituted an unjustifiable limitation of the right to privacy on so the sections were struck down.  The Constitutional Court suspended the declaration of invalidity for a period of six months to allow Parliament to rectify the defect, and provided that in the interim requires SARS to obtain a warrant from a Magistrate or Judge before conducting searches of private residences.

OCS, the third application in this matter, whose directors, the first and second applicants, Mr Patrick Gaertner (“Gaertner“), Mr Klemp and, OCS (an importer and distributor of frozen foods), brought the application to declare relevant parts of section 4 of the Customs Act unconstitutional; to declare searches that had been conducted at OCS’s  premises and Gaertner’s home unlawful; and requiring SARS to return all documents seized or copied during those searches.

Section 4(4) to (6) of the Customs Act effectively grants  SARS officials  broad powers of search and seizure and allows those officials”without previous note, at any time enter any premises whatsoever and make such examination and enquiry as he deems necessary”, and allows the official to require the production of, copy and remove documents”.  It allows the officer to break open “any door or window or break through any wall” on the premises if refused access (although may only do so at night in the presence of a police officer).

The applicants contended that this section constituted an unjustifiable infringement of the right to privacy, protected in section 14 of the Constitution.

SARS conceded in its heads of argument that the relevant sections of the Customs Act were in breach of the right to privacy and so invalid, however, disagreed with the applicants about the extent of the invalidity and what the court’s remedy should be (whether it should be declared invalid retrospectively, whether the declaration of invalidity should be suspended to allow Parliament to resolve the issue, and what the position should be pending the resolution by Parliament).

The disagreement about the extent of the validity was effectively as follows: the applicants argued that the Customs Act should make a distinction between “routine” searches and “non-routine” or “targeted” searches.  The applicants argued that to the extent the Customs Act allowed warrantless non-routine searches it was invalid.

Routine searches are essentially ordinary inspections and examinations in terms of the Customs Act, whilst non-routine searches are those where there exists a suspicion that there has been a contravention of the Customs Act and the search will reveal evidence of that contravention.

SARS argued for a distinction between searches of “designated premises” and other premises, and that the Customs Act was only invalid to the extent it allowed warrantless searches of other premises.

Designated premises include transit sheds or container terminals under section 6(1) of the Customs Act, premises licensed under Chapter VIII and rebate stores under rules made under section 120.

The High Court did find that the sections of the Customs Act were invalid in that it did not make the appropriate distinctions between either routine and non-routine searches, and between searches of designated and non-designated properties.

The declaration of invalidity was suspended for 18 months to allow the legislature to amend the sections, and was not made retrospective.  The High Court did order that sections be read into section 4 of the Customs Act setting out requirements for the non-routine search of designated premises.

The declaration of invalidity was confirmed by the Constitutional Court. Madlanga J, writing for a unanimous court, emphasised that the case, and the right to privacy must be in the context of history of South Africa, specifically:

“Kubomvu!” is the warning that a lookout would sound on the arrival of police at one or the other of the homes that had the misfortune of being subjected to frequent, warrantless police searches.To the apartheid state the oppressed majority had no privacy to be protected; and no dignity to be respected. Of course, the warning could only be sounded on some of those occasions when the police descended for the searches during the day. Most certainly for effect and possibly heightened indignity, many of the egregious searches were conducted at the dead of night: a time of relaxation; sleep; intimacy; reckless abandon even; and when some, if not most, would be flimsily dressed. The sense of violation and degradation that the victims must have experienced is manifest. Even members of the then dominant race who were viewed as enemies of the state suffered this indignity. It is with this painful history in mind that we consider the constitutional validity of statutory provisions that authorise searches without warrants.

The Constitutional Court emphasised that the right that was infringed by the provisions of the Customs Act is therefore an important one, but it is not absolute. It was limited here for the purpose of ensuring proper payment of excise duties and levies that make up a significant amount of the total revenue collected by SARS. The Constitutional Court did note that the right to privacy has less strength in the conduct of business, and particularly where those premises are used for the import of goods, it is important that this industry is tightly regulated. To a certain extent that a participant in this industry must expect her business premises to be the subject of examination to ensure compliance with the regulatory scheme. However, this does not apply to private residences where the expectation of privacy remains strong. The Customs Act does not, however, distinguish between the two.

The Court noted that “[i]t is difficult to see how the achievement of the basic purposes of the Customs and Excise Act requires that inspectors be allowed to enter private homes and inspect documents and possessions at will.” The Court found that the current provisions of the Customs Act were too restrictive in that it allowed warrantless searches of private residences, and had not limits as to the time, place and scope of those searches. The Constitutional Court did not consider it appropriate to make the distinctions between routing and non-routine searches, as well as the distinction between the types of premises made by the parties in the matter. The Court indicated that it should be up to the Legislature to make these kinds of find distinctions.

The sections were therefore declared invalid, but the Court held that the declaration should not apply to cases finalised before the date of the order of invalidity. The declaration was suspended for six months to allow the Legislature to remedy the defect. The period was shortened from 18 months in the High Court’s judgment because SARS had submitted that an amendment bill had already been published for comment in July 2013, and that SARS expected the bill to be passed into law by February 2014.

Pending the resolution of the matter by Parliament, the Constitutional Court ordered that section 4(4) of the Customs Act should be read so that a customs official may only search private residences with a warrant for a magistrate or judge. In order to obtain the warrant the official must provide reasonable grounds for suspecting a contravention of the Customs Act, that a search of the premises will provide information related to the contravention, and the search is reasonably necessary for the purposes of the Customs Act. Provision is also made that if an official believes an warrant would be issued under the requirements set out, and the purpose of the search would be defeated by the delay in obtaining the warrant, that official may enter and search a private residence without a warrant.

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