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WCLawyer
WCLawyer, Attorney
Category: South Africa Law
Satisfied Customers: 14759
Experience:  L.LB (UOVS)
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Could you please explain the process within the South African

Resolved Question:

Could you please explain the process within the South African legal frame work of how to make a claim against a client who has not made payment on a commercial invoice for imported goods. The goods have not received as the client has not yet paid the duty and VAT to the customs broker either. The client has been procrastinating and assuring payment for nearly ten month. I want to explore the next step and I am tired of being lied to plus the product is foodstuff with a used by date at the end of December 2013. The client claims to be too busy to talk and is not returning email with any explanation. The value of outsanding invoices is about 75000 ZAR and another 25000+ ZAR owing to the customs broker for duty and VAT paid on their behalf. Looking forward to hearing from you
Submitted: 10 months ago.
Category: South Africa Law
Expert:  WCLawyer replied 10 months ago.
Good day and thank you for your question. My name is XXXXX XXXXX I will try and assist you today.

In order to provide you with the most accurate answer, I may have to ask you a lot of questions. This may seem tedious and irrelevant, but trust me, there is a reason for every question. So please be patient throughout the process and if it takes a little long for me to come back to you, it is probably because I am researching your answer. I hope that is okay.

I get the impression that you are not resident in South Africa. Is this correct?
Customer: replied 10 months ago.

Hi John


 


You are correct I am not a South African Resident

Customer: replied 10 months ago.

Please go ahead with any questions you need to ask

Expert:  WCLawyer replied 10 months ago.
Are you liable for the customs broker or is he?
Customer: replied 10 months ago.

The client is liable to the customs broker and procedure for imprtation enters on their VAT registration etc. I have paid all charges to the broker. So it is embarassing for me also that this client has turn out to be tircky to deal with. The client has also been telling the broker that he is going to pay but no payment comes through when he says. The broker was also at the point to have the goods destroyed as it seems the only way for them to be refunded for the duty and VAT paid out on the clients behalf.

Expert:  WCLawyer replied 10 months ago.
You know the agreement between you and the buyer better than I at this stage. Is there anything that you can think of that would put you in breach of that agreement? It does seem as if you complied fully, but can you confirm this for me?
Customer: replied 10 months ago.

The product if quite unique and when customs entry was made with the classification used from the exporting country and the same code I use for importation into Europe and Australia, South African customs querried it and and claimed it should be another classification with much higher duty rate and thus VAT. My broker lodged an appeal which after nearly six month came back negative so the higher rate had to be used. I always told the client if we lost the appeal I would reimburse / give discount so that the total amount payable for his duty and VAT would be the same as if the lower rate. I issued amended invoices with discount after South African customs made their final classification.

Customer: replied 10 months ago.

I am not responsible for how South African Customs makes final classification. It should also be noted that if the shipment had been sent from Europe the duty rate would have been zero, however I looked into the added freight cost of this and other additional expenses and there was no saving to the initial expected classification rate if it went directly from the country of origin. There was no possible saving.

Customer: replied 10 months ago.

There does not seem to be any problem with the amount to be paid by the client. It is just I am fed up with being lied to about when payment is going to be made. The customs broker also. My trust has been exhausted and this guy is just irresponsible and won't communicate or explain what is going on.

Expert:  WCLawyer replied 10 months ago.
I don't think that is going to be a problem as such. You offered the goods at a certain value, taxes included and you still stand by that offer, so I think your are fine on that aspect.

The fact that he did not pick up the goods is also not an issue. He was always going to have to pick up the stuff.

The only thing that could potentially be an issue is the fact that the goods are perishable and that, due to the fact that it was held up at customs, he now has less time to sell it. But those damages can only be calculated if he attempts to sell it and he has a duty to mitigate those damages. So, that is a non-argument if he refuses to accept the goods.

Unfortunately, the next step would be to sue him for the money.

There is not much else that you can do other than to find an attorney within the same town as this client of yours live and to ask him to start the legal process against him. You can find an attorney at www.attorneys.co.za.

What they are going to do is to send out a letter of demand to him. This will take 14 days to complete. Then, if he does not react, the attorney will issue summons and from here on, it turns unsure. Either he will react and make an offer or pay or whatever, or he will file a notice of intention to defend. Once this happens, the matter will proceed to trial and this can take anything between 18 - 36 months, depending on how busy the courts are where he lives.

You not need be in the country for this, only for the trial and only if the matter proceeds to trial and is not settled before.

You need to look for a commercial litigation attorney as his/her specialty.

I am not sure what else I can advise you on, but if you have follow up questions before you rate, feel free to ask them at no extra cost. If you are satisfied with the service, kindly rate it positively.
Customer: replied 10 months ago.

I have read through you answer and that is what I sort of expected but I belive I need to get onto things because time is ticking by. So would you suggest I hastle him any more or just launch a letter of demand with an attorney? Should I make my intension to launch a letter of demand or just do it? Maybe please pay within the next 2 week otherwise I will launch proceedings. Finally can you please inform me of the intial cost to made a letter of demand? and what the general court charges etc will come to as I need to find out what this proceedure will cost

Customer: replied 10 months ago.

Can court cost and attorney fees be claimed too?

Expert:  WCLawyer replied 10 months ago.
I don't see why you have to delay any longer. An attorneys letter of demand may shake things loose a little faster than you just threatening. If you want to send a letter yourself, shorten the period. Make it 48 hours and then you go see an attorney.

If he pays on the summons, I doubt that it will cost more than R 3000. If this goes a full trial, you will probably pay about R 50 000, but you should get most of it back if you win the case. You will probably not be required to pay all of this money in one go. It is going to be stretched out over this 18 - 36 month period.

You are also entitled to 15,5% interest per annum on your claim amount from the date that the money was due to you.

I don't know what the situation is in the USA, but in South African law, the loser normally pays the legal costs of the winner.
Customer: replied 10 months ago.

Sorry to keep asking about the costs involved. I understand that initially it will be about 3000 R. Is this just the court charges or would this include the atterney fees as well? Once I know this I think I am right to proceed. Thanks for your help.

Expert:  WCLawyer replied 10 months ago.

It is not a problem. Ask as many questions as you like.

 

There are no court charges. Only attorneys fees. Our courts have done away with charging an administration fee to start legal proceedings.

WCLawyer, Attorney
Category: South Africa Law
Satisfied Customers: 14759
Experience: L.LB (UOVS)
WCLawyer and other South Africa Law Specialists are ready to help you

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