## Facts

- First National Bank of South Africa Ltd., trading as Wesbank (FNB), financed motor vehicles through installment-sale and lease arrangements, retaining ownership under those agreements.
- Two FNB customers incurred customs and excise liabilities (duties, penalties, and related charges) unrelated to the financed vehicles.
- Relying on section 114 of the Customs and Excise Act 91 of 1964, the revenue authority detained three vehicles owned by FNB, asserted a lien over them, and threatened to sell them to satisfy the customers’ customs debts.
- FNB was not the customs debtor and had not consented to have its property serve as security for its customers’ customs liabilities.
- The High Court rejected FNB’s constitutional challenge; FNB obtained direct leave to appeal, and the Constitutional Court heard the consolidated matters, with only one presenting a live constitutional dispute.

## Issues

1. Whether detention and threatened sale of an owner’s goods to satisfy another person’s customs debt constitutes a deprivation of property under section 25(1) of the Constitution.
2. Whether such deprivation is “arbitrary” where the affected owner is a third party not liable for the customs debt.
3. What constitutional remedy is appropriate if the statutory power is invalid as applied to third-party property.

## Decision

- The Constitutional Court reversed the High Court.
- The Court held that the detention and threatened sale of FNB’s vehicles would constitute a deprivation of FNB’s property under section 25(1).
- The Court held the deprivation was arbitrary because section 114, as applied to third-party owners, lacked sufficient justification and proportionality between means (seizure and sale of third-party goods) and the fiscal end (collection of customs debts).
- The Court declared section 114 unconstitutional only to the extent it subjected goods owned by persons other than the customs debtor to lien, detention, and sale for that debtor’s customs debt.
- The Court issued costs orders, including costs of three counsel in the Constitutional Court.

## Legal Principles

- Ownership of movable goods is “property” protected by constitutional property guarantees, even if the owner lacks possession or use at the time of state interference.
- A forced detention and sale materially impair incidents of ownership and constitute a “deprivation of property.”
- “Arbitrary” deprivation includes deprivations for which there is insufficient reason, assessed by examining the relationship among the law’s purpose, the affected person, the nature of the property, and the extent and impact of the interference; proportionality between means and ends is central.
- A legitimate fiscal objective does not, by itself, justify imposing the full risk of debt collection on an uninvolved third-party owner without an adequate connection to the debt and without sufficient safeguards.
- Constitutional property analysis proceeds by determining (1) deprivation, (2) whether it is arbitrary under section 25(1), and only then considering whether the interference amounts to expropriation with compensation implications.
- A tailored declaration of invalidity may preserve a statute’s valid applications while removing unconstitutional applications.

## Conclusion

The Court held that using customs enforcement powers to detain and sell an innocent third party’s property to satisfy another’s customs debt is an arbitrary deprivation of property, and it limited the statutory provision so that only the customs debtor’s own goods could be subjected to lien, detention, and sale for the debt.


First Nat'l Bank of S. Afr. Ltd. t/a Wesbank v. Comm'r for the S. Afr. Revenue Serv., 2002 (4) SA 768 (S. Afr. Const. Ct. 2002)