All those involved in clearing and forwarding will be only too familiar with the South African culture of non payment. Fortunately, our law grants freight forwarders a lien or right of retention, a weapon which is not available to most other creditors. In simple terms they can hang on to goods until they get paid.
At common law, a freight forwarder may exercise a lien called a debtor or creditor lien over goods which they have forwarded or cleared to ensure the payment of fees, freight or storage. However, the common law lien may only be exercised over the exact goods in respect of which expenses have been incurred. In other words one cannot retain a client's container for unpaid expenses relating to a previous shipment.
This is why it is advisable to include a general lien in one's standard trading terms. Clause 38 of the SAAFF (SA Association of Freight Forwarders) Trading Terms is a good example of such a term. This enables one to retain any goods belonging to the debtor for unpaid accounts, irrespective of whether the debts relate to the goods retained.
There is a common perception that a lien may only be perfected by a court. This is not the case. However a lien is only valid as long as the goods are in the possession of the forwarder and remain in its possession. Where the goods are in the hands of a third party, such as a container yard, the container yard must agree to hold the goods on the freight forwarder's behalf. Such consent should be obtained in writing.
It is also necessary to quantify one's claim and communicate the fact that one is asserting a lien to the debtor.
On a practical level, it is not always a good idea to refuse to accept any more business from a client who owes money. Rather wait until his next shipment is safely in your hands and then negotiate your outstanding invoices!
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